Axis Bank fined for imposing wrong charges on Loan Account
Shamli, Uttar Pradesh: The District Consumer Disputes Redressal Commission in Shamli heard a case about wrong deductions of publication charges on a gold loan. The Commission ordered the bank to pay a fine of ₹31,717.
Sachin Kumar, a resident of Nehru Market, filed a complaint on February 19, 2021, against the branch manager of Axis Bank, Dhimanpura, Shamli. He said that he had a savings account in the bank and took a gold loan of ₹78,000 by pledging 49.20 grams of gold.
The gold loan was for 12 months starting from July 16, 2019. Soon after this, COVID pandemic occurred and nationwide lockdown was imposed, which prevented him from repaying the loan.
The complainant said that during the lockdown, the RBI and Government of India had instructed banks not to charge interest or penalties on loans below ₹2 crore. However, the bank charged ₹10,890 as interest and penalty on his gold loan on July 16, 2020, raising the total loan amount to ₹88,980.
On August 27, 2020, the bank deducted ₹49,655 from his savings account towards the loan. After this, the remaining balance of the gold loan was ₹39,325. Later, on November 19, 2020, he deposited ₹1 lakh in his savings account. But instead of deducting only the balance amount, the bank deducted ₹46,042 on November 20, 2020.
After this bank deducted Rs. 6,717 from his account. When he asked the bank about this deduction, they said ₹6,717 was charged as a publication fee for advertising the auction of his pledged gold. The gold was being auctioned as the borrower failed to repay the loan. The bank could not show in which newspaper the notice was published. The complainant said the bank ignored government and RBI guidelines and unfairly charged the publication fee.
Commission Chairman Hemant Kumar Gupta ordered the bank to refund ₹6,717 with 6% interest from the date of deduction till payment. He also imposed a fine of ₹25,000 on the bank for unfair trade practices.
