Consumer Commission Orders SBI to Pay Rs.2 Lakh Compensation for not renewing PMJJBY insurance

Bundi, Rajasthan: The District Consumer Commission has directed State Bank of India (SBI) to pay ₹2 lakh as compensation to a customer for failing to deduct the insurance premium from the account of customer. The commission also ordered SBI to pay 9% annual simple interest within two months from the date of the complaint, along with ₹5,000 each towards legal expenses and mental agony.

The complainant, Madhav Prasad Vijayvargiya, had insured his wife under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) many years ago through the State Bank of India (SBI) branch at Indira Market. Under this scheme, the annual premium was regularly deducted from the account through an auto-debit facility.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a life insurance scheme offered by the Indian government. It provides life cover of ₹2 lakh for death due to any reason, with an annual premium of ₹436. All individual (single or joint) account holders in the age group of 18 to 50 years can join this scheme.

However, in 2023, the bank failed to deduct the premium amount. Due to this, the insurance policy was not renewed. As per complainant, neither the bank deducted premium nor informed the claimanant about it.

On 14 May 2024, the complainant’s wife passed away. When Vijayvargiya approached the bank to claim the insurance amount, he was told that the premium had not been deducted in 2023 due to insufficient balance in his wife’s account. As a result, there was no valid insurance coverage during the year of her death.

Vijayvargiya filed a complaint with the District Consumer Commission, arguing that the bank’s claim of insufficient funds was false, as there was adequate balance in the account at that time.

After reviewing the arguments and evidence, the Commission concluded that the bank had acted negligently and engaged in unethical business practices by failing to process the premium payment and by not notifying the customer.

The Commission ordered SBI to:

• Pay ₹2 lakh compensation to the complainant.
• Pay 9% annual simple interest from the date of the complaint, within two months.
• Pay ₹5,000 each for legal costs and mental harassment.

PMJJBY Insurance Premium and How to Join?

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a beneficial life insurance scheme launched by the Government of India. Enrolling in this scheme is simple — you can join by visiting your nearest bank branch and filling out the required application form. Under PMJJBY, a nominal annual premium is payable to avail the coverage. The premium details are as follows:

• The premium payable is Rs.436/- per annum per subscriber.

For those getting enrolled under PMJJBY for the first time during the middle of the policy period, payment of pro-rata premium is allowed as under;

• a) For enrolment in June, July and August – Full annual premium of Rs.436/- is payable.
• b) For enrolment in September, October, and November – pro rata premium of Rs. 342/- is payable
• c) For enrolment in December, January and February – pro rata premium of Rs. 228/- is payable.
• d) For enrolment in March, April and May – pro rata premium of Rs. 114/- is payable.

However, full year’s premium @ Rs 436/- is payable at the time of renewal under the scheme.