‘Bank can’t charge interest for delay in loan a/c closure’

Vadodara: A bank can’t charge interest from the customer if it takes time to process the sloan account closure. A Vadodara consumer forum has asked Kotak Mahindra Bank Ltd to pay the interest amount it charged to its customer who had sought to close his loan account.
Rajnikant Panchmatia, a resident of Mujmahuda Road, had filed a case against the bank through Jagrut Nagrik in 2017. He said in his complaint that he had taken a property loan of Rs 40 lakh from the bank in 2015. In 2016, Panchmatia approached the bank with a demand draft of Rs 38 lakh on September 1, 2016 towards loan settlement and asked the bank to close his loan account.
On September 27, 2016, he gave an application for a balance transfer of his loan. His account was closed on October 10, 2016, but the bank charged him Rs 54,292 interest for the days that it took to close the loan account. Panchmatia then approached the consumer forum and prayed that his demand draft for loan settlement was ready on August 31, 2016, but the bank didn’t accept it and asked him to wait for a foreclosure letter.
Panchmatia further alleged that the bank delayed the loan closure process by 47 days due to which he had to pay the interest. The bank argued that Panchmatia asked for closing his loan account on September 1, 2016, but on September 27, 2016, he requested for transfer of the balance loan to ICICI Bank. Kotak Bank said that the new request led to them to initiate a different process which was over and ultimately the loan closure was completed on October 10, 2016.
The bank also argued that it is not a private firm but a multi-national company that has to act as per rules and regulations and follow certain procedures. The bank said that it had extended financial benefit to Panchmatia by waiving the pre-payment charges of four percent of the outstanding loan.
After hearing both parties, the Vadodara Consumer Dispute Redressal Commission (additional) said that only the demand draft was required to be submitted along with the foreclosure proposal which was provided by the opponent.
The forum observed that had the demand draft been accepted by the bank or had it permitted the complainant to deposit it in his loan account on September 1, 2016, then the loan account would have been closed on the same day. And, there wouldn’t have been any question of charging interest for the period thereafter.
“We believe that in this age of fast communication and competition, the opponent could have accepted the demand draft and credited the same in the complainant’s loan account which is not done,” the forum said and added that it is deliberate and unreasonable conduct of the opponent and it is not just a deficiency in service but also negligence.