SBI Held Liable For Deficiency In Service For Excess Recovery At Home Loan Closure: Chandigarh Consumer Commission

The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising Mr. Amrinder Singh Sidhu (President) and Mr. B.M. Sharma (Member), has held the State Bank of India liable for deficiency in service and unfair trade practice for recovering an excess amount from the borrower (complainant) at the time of closure of his home loan despite recalculation directions issued by the Banking Ombudsman. Brief facts of the Case:The complainant, Dilbar Singh, had obtained a home loan of ₹5,00,000 from the State Bank of India in 2009 under a floating rate of interest with a repayment tenure of 15 years. He regularly paid EMIs through ECS. In 2019, after making payments for nearly a decade, he was informed that ₹4,57,325 remained outstanding. On examining the loan account, he alleged that the bank had applied a higher interest rate than agreed. After his representations were not addressed, he approached the RBI Banking Ombudsman. The Ombudsman directed the bank to recalculate the loan account by applying the applicable Base Rate and MCLR from the specified dates. In compliance, the bank credited ₹96,922 to the complainant's account and issued a revised statement showing reduced outstanding dues. However, at the time of loan closure on 11 July 2019, the complainant was made to pay ₹2,01,728 and was issued a No Due Certificate. Claiming that this amount exceeded the actual dues, he filed a consumer complaint alleging deficiency in service and unfair trade practice. Contentions of the Bank:The bank contended that the interest had been applied as per applicable norms and that the account statement relied upon by the complainant contained calculation errors due to manual preparation, including repeated credit entries. According to the bank, these errors were subsequently corrected, a revised statement was issued, and ₹96,922 was refunded in compliance with the Ombudsman's order, leaving no further amount due. The bank denied any deficiency in service or unfair trade practice. Observation and Decision of the Case:The Commission noted that pursuant to the Ombudsman's directions, the bank had recalculated the loan account and credited ₹96,922 to the complainant. It further observed that ₹59,155 was outstanding as on 27 June 2019, which became ₹62,857 by 11 July 2019, the date of loan closure. Despite this, the bank recovered ₹2,01,728 from the complainant at the time of closure. Upon examining the account statements and calculations, the Commission concluded that the bank had recovered an excess amount of ₹41,949. Accordingly, the Commission partly allowed the complaint and directed the bank to refund ₹41,949 with interest at 9% per annum from 11 July 2019 till realization, along with ₹10,000 as compensation and litigation costs, to be paid within 60 days.Case Title: Dilbar Singh v. State Bank of IndiaCase No. DC/AB1/44/CC/18/2021 Click Here To Read/Download Order

SBI Held Liable For Deficiency In Service For Excess Recovery At Home Loan Closure: Chandigarh Consumer Commission

Praveen Mishra

Tags