Can Banker’s be penalized for their mistakes? - “An awareness campaign” with a personal experience to share.

Banks are lifeline for financial system in a country and it is governed by various laws. Whilst I appreciate all the services which they offer, at times I’m disturbed the way we are treated by the banks. Any flaw from the customer side is immediately charged to the customer in the form of interest /late payment/penalty etc., but who would penalize the banks for an error committed by them? Do we have an open window system where common public can reach out to raise our concerns against such flaws and claim compensation?

The article narrates a real life incident which I have undergone with India’s largest private sector bank.  My uncle who got retired very recently invested his retiral benefits in Fixed Deposit (FD). He promptly submitted Form 15G (The form is to declare that the total interest income for the year is less than minimum exemption limit) at the time of investing his money in FD in order to ensure that his little income doesn’t attract any TDS.

As he being new to such banking norms, he failed to collect the acknowledgement of the Form 15G submitted with the bank. To his surprise after 3 months he got his interest statement from the “Leading Private Sector Bank” along with Tax Deducted at Source (TDS) deductions. He was helpless and he brought this issue to my notice.

My uncle and I visited the branch to enquire the rationale behind the deductions. On further investigation we happen to know that the bank has conveniently ignored his Form 15G and hence TDS was deducted on his interest income. As the response was not up to the expectations, I escalated the issue to the Bank Manager. The Bank manager promised us to look into the issue and help us in getting the money back.

My uncle was made to follow up on this issue 4 times with the Bank Manager and after 2 months he got his money refunded. Now, who would pay for the loss for the bank’s negligence? Given the age he was made to travel from pole to pillar for his refund which put him under severe turmoil and also the money refunded was not paid with interest.

There should be an investor campaign on such issues to raise awareness. An easily accessible grievance redressal forum is required. A law to be framed to ensure such negligence is compensated by the bank instantly. Will all these come to light?

Let’s voice it out!!!