The District Consumer Disputes Redressal Commission, Lakhimpur Kheri, has held the State Bank of India (SBI) liable for deficiency in service for sharing a customer’s personal bank account details with his employer without his consent.
The Commission said that a bank cannot share a customer’s personal banking information with a third party without the customer’s consent. It held that such an unauthorized disclosure violates banking norms and amounts to deficiency in service.
What is the case about?
The complainant, Pankaj Kumar Shukla, had a savings account with SBI’s Hargaon Branch in Sitapur. He was working with Govind Sugar Mill.
A labour dispute was pending before the Lucknow Bench of the Allahabad High Court. During the case, Govind Sugar Mill filed a counter affidavit containing details of Shukla’s savings account.
Shukla alleged that SBI had shared his bank account details with his employer without his consent. He also claimed that the account statement contained some incorrect entries, which were later corrected by the bank.
The complainant said that the unauthorized disclosure of his personal banking information and the incorrect entries caused him mental agony, physical hardship and financial loss. He approached the bank and sought an explanation and correction of the account details.
However, he was not satisfied with the bank’s explanation regarding the disclosure of his account information. He then filed a consumer complaint before the District Consumer Disputes Redressal Commission, Lakhimpur Kheri.
In his complaint, Shukla sought compensation for deficiency in service, mental agony and litigation costs.
What SBI said?
SBI denied any deficiency in service and argued that the complaint was not maintainable. The bank said that Shukla was an employee of Govind Sugar Mill and his salary was credited through the employer’s account maintained with the bank.
According to SBI, the account statement was provided to the employer only to reconcile salary payments. The bank said the information was shared at the employer’s request and in accordance with banking practices.
SBI also claimed that no incorrect entries were made in the complainant’s account. The bank denied sharing any confidential information without authorization and requested the Commission to dismiss the complaint.
What commission said?
However, the Consumer Commission observed that Shukla’s savings account was his personal bank account. The bank had shared details of the account with his employer without obtaining his consent.
The Commission held that a bank cannot disclose a customer’s personal banking information to a third party without the customer’s permission.
It concluded that the unauthorized disclosure was a clear violation of banking norms and amounted to deficiency in service.
Accordingly, the Commission partly allowed the complaint and directed SBI to pay ₹20,000 as compensation for the mental agony and physical hardship caused to the complainant.
The Commission also directed the bank to pay 6% annual interest on the compensation amount from the date the complaint was filed until the amount is paid.
In addition, SBI was directed to pay ₹5,000 towards litigation costs. The complaint against the remaining opposite parties was dismissed.
What This Order Means for Bank Customers
The order highlights an important issue related to the privacy of bank customers. A customer’s savings account may receive salary payments from an employer, but the account still remains the personal account of the customer.
According to the Commission’s findings in this case, the fact that an employer sends salary to an employee’s bank account does not automatically give the employer the right to obtain the employee’s personal account details.
The case also shows that banks need to be careful while responding to requests for customer information. If personal banking details are shared without proper consent or legal authority, the customer may raise the matter before the appropriate forum.
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