SBI's 90-Day Deadline Defence Rejected in Consumer Dispute Case
Nagpur Consumer Commission Orders SBI to Pay Rs 5 Lakh to Widow
A recent verdict by the District Consumer Disputes Redressal Commission (Additional DCF) in Maharashtra's Nagpur has ordered the State Bank of India (SBI) to pay Rs 5 lakh to a widow, despite a six-year delay in filing the insurance claim. The commission ruled that the bank's refusal to pay the insurance amount was a "deficiency in service and unjust", and that the bank's failure to inform customers of their rights cannot be used as a shield.
According to the complaint, the widow's husband had an account with the bank's Tri Junction Cantonment area in Nagpur, and insurance protection up to Rs 5 lakh was being provided to relevant debit cardholders. However, no information about this was given to her or her husband, and the bank claimed that insurance protection was not applicable to her husband's 'MasterCard Classic' type of ATM/debit card.
The commission rejected the bank's contention, stating that no solid document was submitted to clearly mention that insurance protection was not applicable to 'MasterCard Classic' cards. Documents on record mention that insurance protection was applicable to other types of debit cards, but no clear exclusion clause was mentioned regarding 'MasterCard Classic'.
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| Bank's Claim | Commission's Ruling |
|---|---|
| Insurance protection not applicable to 'MasterCard Classic' | No solid document submitted to clearly mention exclusion clause |
| Complainant failed to submit insurance claim within 90 days | Commission rejected claim on this ground, as bank failed to inform customers of their rights |
The commission also emphasized that if a bank claims insurance protection is not applicable to a particular card, it must clearly provide the conditions and supporting documentation. In this case, since other cardholders received insurance coverage without any fees, treating customers differently under similar circumstances was deemed unfair and amounted to a "deficiency in service", it said.
The bank was ordered to pay not only the Rs 5 lakh insurance amount with six per cent annual interest from the date the complaint was filed (September 5, 2019), but also Rs 10,000 for mental agony and litigation costs. The commission noted that following the sudden death of her husband, "it is natural for the complainant to suffer a mental shock and take some time to recover from that situation".
Investor Takeaway
SBI's 90-day deadline defence was rejected in a consumer dispute case, which may have a minor negative impact on the bank's reputation.
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