Chandigarh

DF-II

CC/721/2018

Mr. Abhinav Singhania - Complainant(s)

Versus

Indusind Bank Ltd. - Opp.Party(s)

In Person

28 Aug 2019

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	721 of 2018
Date  of  Institution	:	17.12.2018
Date   of   Decision	:	28.08.2019

 

 

 

 

 

1]  Mr.Abhinav Singhania,

2]  Mr.P.R.Singhania,

Both residents of H.No.3029, 2^nd Floor, Ajanta Enclave, Sector 51-D, Chandigarh 160047

 

             ……..Complainants

 

Versus

 

1]  IndusInd Bank Ltd., 359-360, Sector 35-B, Chandigarh through Branch Manager. 

 

2]  Executive Vice President & Principal Nodal officer, IndusInd Bank Ltd., 701/801, Solitaire Corporate Park, 167, Guru Hargovindji Marg, Andheri-Ghatkopar Link Road, Chakala Andheri (East) Mumbai 400 093

 

3]  The Zonal Manager, IndusInd Bank Ltd., 3^rd Floor Vasant Square, Mall Vasant Kunj, New Delhi

 

4]  Head – Banking Branch Operations, IndsInd Bank Ltd., 8^th Floor, Tower 1, One India Bulls Centre, Jupiter Mills Compound, 841, S.B. Marg, Elphinstone Road (West), Mumbai 400013

 

 

 

………. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN            PRESIDENT

SMT.PRITI MALHOTRA        MEMBER

            SH.RAVINDER SINGH         MEMBER

 

For Complainant      :    Complainant NO.2 in person and             on behalf of complainant No.1.

 

For Opposite Parties :    Sh.Arun Dogra, Advocate

 

PER RAVINDER SINGH, MEMBER

 

         Briefly stated, the complainant No.1, opened NRE Savings Bank Account NO.100021654487 with Opposite Party No.1. It is averred that the complainant No.1 was having following three Fixed Deposits with Opposite Party No.1:

Sr.No.	FDR No.	Maturity Amount	Date of Maturity
1.	300709275106	314844.83	8.9.2018
2.	300709275311	314844.83	8.9.2018
3.	300709275137	314844.83	8.9.2018
	Total	Rs.944534.49

 

         It is averred that the complainant No.2 (Mandate Holder from complainant No.1) visited the Opposite Party No.1 on 11.9.2018 for closure of the FDRs and credit the amount thereof in the account to which they refused on the pretext that the NRE Account has been marked as dormant.  Accordingly, the complainant No.1 got the dormancy removed from his NRE S.B. Account and then complainant No.2 again visited Opposite Party No.1 on 13.9.2018 for credit of the said FDRs in the said account, but they again refused to credit the amount of FDRs on the pretext of clearing re-KYC documentation for activation of NRE S.B. Account.  It is averred that Opposite Party No.1 never asked for e-KYC during the period of FDRs.  The matter was reported to the Opposite Parties and even a legal notice was also sent, but they did nothing.  It is submitted that the complainant could submit re-KYC documents to Opposite Party No.1 by email on 2.10.2018.  It is also submitted that after much persuasion and communication with the Opposite Parties, they paid the amount of FDRs on 8.10.2018 after delay of 30 days, whereas all the three FDRs were due on 8.9.2018.  It is further submitted that the OPs have wrongly and illegally freezed the account of the complainant and made unnecessary demand of clearing re-KYC which was not applicable to the account of the complainant as it was opened on 17.12.2012. It is stated that due to said deficient act of the Opposite Parties the complainant not only suffered financial loss, but also suffered mental agony and harassment.  Hence, this complaint.

 

2]       The Opposite Parties have filed joint reply and while admitting the factual matrix of the case, stated that on receipt of the FDRs for crediting in the Savings Account, it was observed by the bank that the NRE SB Account of complainant No.1 was under freezed. It is submitted that since the complainant No.1 did not submit documents for re-KYC, the NRE SB Account of complainant No.1 was in a state of total freeze, as such the amount of FDRS could not be transferred in the NRE SB Account. It is stated that upon clearance of total freeze marked in customer’s account, the FDRs were closed on 8.10.2018.  It is also stated that the FDRs of complainant No.1 were closed with value date 8.9.2018 meaning thereby no loss has been caused to consumer i.e. complainant No.1 as the FDRs were value date closed and the interest was given till the date of closure i.e. 8.9.2018.  It is further stated that the time consumed in closure of FDRs and crediting the amount to the bank account of the complainant No.1, solely occurred due to reasons beyond the control of the Opposite Parties. Pleading no deficiency in service and denying all other allegations, the Opposite Parties have prayed for dismissal of the complaint. 

 

3]       Rejoinder has been filed by the complainant reiterating the assertions as made in the complaint. 

 

4]       Parties led evidence in support of their contentions.

 

5]       We have heard the ld.Counsel for the parties and perused the entire evidence on record.

 

6]       Sh.Abhinav Singhania, complainant No.1 had Fixed Deposits in Three FDRs, which were matured on 8.9.2018. Sh.P.R.Singhania, complainant No.2, father of Abhinav Singhania & authorised signatory for the purpose of operating of NRE S.B.Account No.100021654487 with IndusInd Bank/OP Bank, requested it on 11.9.2018 for credit of maturity amount of all three FDRs in the said savings account.  The OP Bank did not credit the said maturity amount of Rs.9,44,534/- in the account even though the FDRs were matured on 8.9.2018 on plea of non-receipt of KYC (Know Your Customer) documents.

 

7]       The Opposite Parties, only after protracted visits and requests made by the complainants, closed the said FDRs on 8.10.2018 and the credited the amount thereof in the NRE saving bank account with value date as on 8.9.2018. 

 

8]       Admittedly, the Opposite Parties have not paid any interest on the FDRs amount from the date of maturity i.e. 8.9.2018 to 8.10.2018 i.e. the date of credit & closure of FDRs, causing financial loss of interest accrued on the FDRs w.e.f. 8.9.2018 till 8.10.2018 i.e. for one month.

 

9]       The action of IndusInd Bank/OPs is illegal and being exploitative in nature.  The OP Bank was bound to pay the interest on the FDR’s amount from the date of maturity till its closure/credit in the account.

 

10]      The Reserve Bank of India vide Circular No.RBI/DBR/2015-16/18, Master Direction DBR.AML.BC.No.81/14.01.001/2015-16, February 25, 2016, Updated as on December, 08, 2016, issued directions wherein Clause No.39 stipulates as under:-

                                “39.      Partial freezing and closure of accounts

(a) Where REs are unable to comply with the CDD requirements mentioned at Part I to V above, they shall not open accounts, commence business relations or perform transactions. In case of existing business relationship which is not KYC compliant, banks shall ordinarily take step to terminate the existing business relationship after giving due notice.

(b) As an exception to the Rule, banks shall have an option to choose not to terminate business relationship straight away and instead opt for a phased closure of operations in this account as explained below:

i. The option of ‘partial freezing’ shall be exercised after giving due notice of three months to the customers to comply with KYC requirements.

ii. A reminder giving a further period of three months shall also be given.

iii. Thereafter, ‘partial freezing’ shall be imposed by allowing all credits and disallowing all debits with the freedom to close the accounts in case of the account being KYC non-compliant after six months of issuing first notice.

iv. All debits and credits from/ to the accounts shall be disallowed, in case of the account being KYC non-compliant after six months of imposing ‘partial freezing’,

v. The account holders shall have the option, to revive their accounts by submitting the KYC documents.

(c) When an account is closed whether without ‘partial freezing’ or after ‘partial freezing’, the reason for that shall be communicated to account holder.

 

11]      The Reserve Bank of India vide its Circular No. RBI/DBR/2015-16/18, Master Direction DBR.AML.BC.No.81/14.01.001/2015-16, February 25, 2016 (Updated as on July 12, 2018) ( Updated as on April 20, 2018), deleted its mandate/directions as contained in Clause No.39 of its earlier Circular No.RBI/DBR/2015-16/18, Master Direction DBR.AML.BC.No.81/14.01.001/ 2015-16, February 25, 2016, Updated as on December, 08, 2016, as referred above.

12]     The Opposite Parties, in view of the deletion of above mentioned directions of clause 39 of RBI dated 25.2.2016, updated on 8.12.2016, have no legal right to freeze the account.

 

13]      The Opposite Parties by way of deprivation of interest on amount of FDRs for one month, to the complainant, have indulged into unfair trade practice on their part and rendered deficient services.  The Opposite Parties cannot freeze or put any account into dormant position without any serious lapse or fault in operating of the account by the account holder.  It will be injustice if the banks are allowed to deprive the account holders the use of their own savings for their livelihood or to meet out their emergency medical needs etc.  The Opposite Parties have not placed on record any document in proof of issue of notice for KYC documents to the complainant. 

 

14]      It has been noticed that on issue of Know Your Customer (KYC) directions issued by RBI in 2016, the Banks have indulged into mal-practices by asking for fresh identity documents from each account holders and in case the customer/account holder failed to submit the requisite documents, as asked for by the Banks, the accounts are either freezed or put in dormant position stopping all transaction in the account by the account holder.  The ordinary citizen, who are less educated or illiterate like daily wagers, laborers, agriculturist, farm workers, who have little awareness about keeping all the record intact and safe in their possession, suffers a lot in form of deprivation of their right to withdraw or deposit or transfer the amount from their accounts to meet out their daily needs and the requirement of their family members living far away from their place of work.  We have seen people suffering a lot for want of availability of money from their account in case of sudden medical emergency for self or for dependent family member or friend.  It is unfortunate if a person suddenly fell sick or suffer serious ailment or seriously injured in a road accident while admitting in Hospital for treatment, but could not get cash in time from the Bank from his/her own account.  The bank officials most of the time even if approached by the account holders are callous in their nature and have least concern to redress the genuine difficulty/grievance of its customer/account holder.  No doubt the banks have right to ask for or update the identification of its account holders, but that should only be done in case of any serious suspicion or high risk transactions. The instructions issued by Reserve Bank of India in respect of KYS norms have led to grave injustice and inconvenience to the public at large, instead of putting any improvement in the working of the Bank.  People deposit money for safe custody in the Bank and for use in case of need.  No executive instruction can put their money/savings on hold or under seize.  The banks cannot be allowed to harass the public/account holders by way of unwarranted procedure of Accounts putting in dormant positon blocking money transactions therefrom. We deem it appropriate, keeping in view the interest of consumers/account holders & general public at large to forward copy of this order to Reserve Bank of India to re-consider and re-call the KYC instructions keeping into view the hardship being faced by public. The banks may be permitted to freeze the accounts for fresh document only in suspected/suspicious cases on reasonable ground.    

 

15]      Keeping in view the facts & circumstances of the case, as discussed in the preceding paragraphs, the complaint is allowed with direction to the Opposite Parties to pay to the complainant an interest @12% per annum on the total FDR amount of Rs.944534/- for the delayed period from 8.9.2018 to 8.10.2018, along with compensatory cost of Rs.10,000/- on account of mental agony and harassment caused to him. 

         This order shall be complied with by the Opposite parties within a period of 30 days from the date of receipt of certified copy of this order, failing which they shall be liable to pay additional compensatory cost of Rs.10,000/- apart from the above relief.

         A copy of this order be sent to The Governor, Reserve Bank of India, New Delhi, for consideration and necessary action.    

          Certified copy of this order be also sent to the parties, as per rules.

Announced

28^TH August, 2019                                                                 

Sd/-

 (RAJAN DEWAN)

PRESIDENT

                                                                                               

Sd/-

                                                                    (PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER