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Regular-article-logo Tuesday, 01 July 2025

Tell me no lies

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CHECK-OUT / PUSHPA GIRIMAJI Published 17.10.11, 12:00 AM

In future, all those manufacturers and service providers who ignore the consumers’ right to information will have to pay for the consequences. This is a clear message from a recent order of the National Consumer Disputes Redressal Commission.

The central point in this case is the failure of a bank to give its customer proper information about a financial product, thereby causing him monetary loss. In May 1996, Gopal Krishan Singla deposited Rs 60,000 in his PPF account. Subsequently, he deposited Rs 90,000 in July the same year and again in August, Rs 3,90,000. However, the bank refused to pay interest on the amount of Rs 4,80,000 for the period 1996 to 2000, when the money was in the account, resulting in Singhla filing a complaint before the consumer court.

The bank’s contention was that as per the rules framed by the Union government for deposits in individual PPF accounts, an individual could deposit a maximum of Rs 60,000 in a financial year. Any amount deposited suo motu in excess was not eligible for earning interest. Thus the consumer was not entitled to any interest on the excess amount of Rs 4,80,000.

The bank also argued that it was only an agent for the government and it deposited the amount in PPF accounts with the Reserve Bank of India on a daily basis. So the bank did not even make use of the money for any commercial purpose and therefore was not liable to pay any interest on the amount.

The consumer, on the other hand, pointed out that the bank was guilty of deficient service as it had failed to advise or inform him that any deposits in excess of Rs 60,000 would not fetch any interest. Instead, it merrily accepted the excess deposit to the tune of Rs 4,80,000. No person of sound mind would lock up such a huge amount in his PPF account if he were told that the amount would not fetch any interest. So the bank was at fault in not informing him of the rules governing the individual PPF accounts and should therefore pay for this deficiency.

In the end, the commission directed the bank to pay interest on the excess amount in the PPF account at the rate of six per cent per anum. (State Bank of Patiala vs Gopal Krishan Singla, RP No. 1063 of 2010, decided on August 16, 2011) This order clearly reinforces the consumer’s right to information.

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