Banks to pay for delay in closing of Housing Loan Account

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Mumbai: A district consumer forum recently brought to book a bank that made a couple run from pillar to post after they had expressed their willingness to close their housing loan account before maturity. Stating that the complainants experienced financial losses due to an unreasonable and harsh attitude and lack of sensitivity by the bank, the forum observed, “One can understand mental agony, which middle-class people like the complainants, might have undergone due to the loss of a cheque of Rs 3 lakh. The bank should have appreciated this by waiving foreclosure charges as well as the interest from January 2007 onwards…” Finding the bank guilty of deficiency of service, the forum ordered them to pay the complainants Rs 50,000 as compensation and Rs 5,000 towards the cost of litigation.

In April 2004, the Thane-based complainants, Ashik and Vaishali Ghag, had taken a housing loan from ICICI Bank Ltd. On November 22, 2006, the outstanding amount due against the loan stood at Rs 3.2 lakh, which the Ghags decided to pay off. Ashik filed an application with Employees’ Provident Fund Organization (EPFO) to withdraw Rs 3 lakh for repayment of the loan. The remaining amount was to be paid from a fixed deposit in another bank. On January 11, 2007, EPFO issued a cheque for Rs 3 lakh and send it to ICICI.

However, when the Ghags went to ICICI to deposit the balance, the bank informed them that it had not received the cheque sent by EPFO. After repeated correspondence between the Ghags and the bank, it was found that the cheque had been misplaced. Ashik then executed an indemnity bond at the instance of the officers of the bank. On July 17, 2007, EPFO sent a fresh cheque to the bank. However, EPFO informed Ashik that the cheque was returned undelivered. The Ghags later learnt that the cheque could not be delivered as the bank’s address had changed.

On August 8, 2007, a third cheque was issued. However, owing to the delay in repayment of the dues and closing of the account, the bank levied foreclosure charges despite a request by the Ghags. The Ghags then filed a complaint with the Mumbai Suburban District Consumer Disputes Redressal Forum on September 4, 2008.

The bank claimed that EPFO had not mentioned names of the complainants or the loan account number on the cheque and it was not marked to any particular officer of the bank. Hence, the cheque kept going from one department to another, and in the process, got misplaced. With regards to the change of address, the bank held that the Ghags did not inform EPFO about the new address.

Refuting the bank’s claim, the forum, presided over by J L Deshpande and comprising members D S Bindnurkar and V G Joshi, said the cover letter dated January 1, 2007, by EPFO clearly mentioned the names of the complainants and their account number. The forum held that there were no details on the record to show that the bank had informed the Ghags about change of address or the shifting of its branch.

Had the bank shown a little diligence and presence of mind in tracing out the loan account, the matter could have been amicably resolved in January 2007, observed the forum.

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