Coming down heavily on a public sector bank for initiating recovery proceedings for an education loan that was repaid, the Ernakulam District Consumer Disputes Redressal Forum has directed the Kalamassery branch of the State Bank of India to pay a customer ₹10,000 as compensation.
The directive came on a complaint filed by M.A. Janardanan and his daughter. According to them, they had availed an education loan of ₹73,500 from the branch of the erstwhile State Bank of Travancore in 2006. The entire loan was repaid after settling the outstanding amount at an adalat in April 2016. However, one month after fully paying the outstanding amount, they got a legal notice from the bank, asking them to pay the outstanding amount within 10 days, failing which recovery steps would be initiated. The then branch manger had refused to acknowledge the loan repayment receipt and abused them, alleged the complainants. Besides, the bank withdrew a sum of ₹1,500 that remained in the account of the daughter.
The forum led by its President Cherian K. Kuriakose said it was unable to justify the act of the bank, especially when the loan was sanctioned and availed of by the complainants as an educational loan which was a priority project of the Central government. The negligence on the part of the branch manager in refusing to recall the recovery proceedings initiated immediately after the entire payment was tantamount to deficiency in service.
The forum further observed the bank that had substantial infrastructure and was equipped with the latest technology to identify the money flow had not taken care of the payment made to the account and had issued a threatening recovery notice.
The bank manger contended that even as the loan was settled, the loan account had been “procedurally escalated to the recovery cell” of the bank. The allegation that he had abused and threatened the complainants was incorrect. The complaint was a fabricated one to extort money, the bank argued.
The forum also directed the bank manger to pay the complainants ₹5,000 towards litigation cost.
