Chandigarh District Commission Holds PNB Liable For Premature Encashment Of FDR Without Complainant's Consent

Brief Facts:

The Complainant, as the Karta of Hindi Undivided Family, invested Rs. 36,16,080/- in five Fixed Deposit Receipts (FDRs) with the Punjab National Bank (“PNB”). One FDR, with an amount of Rs. 15,95,329/- @ 6.75%, was set to mature on 20.07.2019. Upon maturity, PNB credited Rs. 10 Lakh into the savings account of the Complainant and renewed the FDR for the remaining amount till 20.07.2020. Subsequently, the FDR of Rs. 7,47,531/- was renewed at an interest rate of 6.05% p.a. Later, PNB broke the FDR without the Complainant's consent and credited Rs. 8,35,560/- at a lower interest rate of 5.30% per annum to the Complainant's account. The Complainant made several communications with the PNB but didn't receive a satisfactory response. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-II, U.T. Chandigarh (“District Commission”).

In response, PNB contended that the Complainant requested closure details of the FDR on 02.12.2022, expressing dissatisfaction with the interest rates. Consequently, an unintended entry led to the amount being credited to the Complainant's account without a penalty. The Complainant was promptly advised to reinvest the amount in an FDR, which he did on 31-12-2022. The bank argued that the FDR was initially recorded with incorrect details due to a system error and was later rectified during a data cleansing exercise. Further, the Complainant's subsequent demands for compensation were met with the bank offering compensation of Rs. 5,000/- which was credited to his account.

Observations by the District Commission:

The District Commission referred to the photocopy of the FDR issued by the PNB and noted that the FDR was initially issued for Rs. 15,95,329/- at an interest rate of 6.75% per annum, with a maturity date of 20.07.2019. The PNB subsequently renewed the FDR at the request of the Complainant for Rs. 7,47,531/-, extending it from 20.07.2020 to 20.08.2023, for 37 months at an interest rate of 6.05% p.a. The renewal stamp affixed by the bank on the FDR receipt indicated a maturity amount of Rs. 8,99,683/-.

Therefore, the District Commission held that the premature encashment of the FDR by the bank at a lower interest rate of 5.30% p.a., without the Complainant's consent or prior notice constituted a deficiency in service. Further, the act of crediting Rs. 8,35,560/- at a lower interest rate into the Complainant's account, also constituted a clear case of deficiency in service and unfair trade practice. PNB's deficient services resulted in a loss of Rs. 64,125/- to the Complainant.

Consequently, the District Commission directed PNB to compensate the Complainant with Rs. 64,123/- (calculated as Rs. 8,99,683/- minus Rs. 8,35,560/-) for the premature encashment of the FDR, along with an interest rate of 7% per annum.