The Navsari Consumer Disputes Redressal Commission (CDRC) has held Bank of Baroda responsible for failing to process a home loan borrower’s application for a subsidy under the Pradhan Mantri Awas Yojana (PMAY). The commission directed the bank to pay ₹3.75 lakh to the borrower along with 9% interest.
Compensation Awarded to the Borrower
The total amount awarded includes ₹2.35 lakh, which the borrower lost as the PMAY subsidy, and ₹1.40 lakh towards the additional interest paid on the home loan because the subsidy was not received. The commission also ordered the bank to pay ₹5,000 as compensation for harassment and litigation expenses.
Home Loan Taken Under PMAY Scheme
According to the complaint, Navsari resident Kiran Tandel and his wife approached Bank of Baroda in 2019 for a home loan under the PMAY scheme. Following the bank’s instructions, they completed all the required documents through the bank’s approved advocate and architect.
On June 4, 2019, the bank sanctioned a home loan of ₹17.70 lakh under the “Baroda Gruh Loan – PMAY Loan” scheme. After receiving the loan, Tandel regularly paid his monthly EMI of ₹15,361, completed the mortgage formalities and also purchased loan insurance.
Borrower Did Not Receive PMAY Subsidy
Although Tandel continued repaying the loan, the promised PMAY subsidy was never credited to his account.
On February 28, 2023, he emailed the bank asking about the status of the subsidy. The bank replied that the matter was “in progress.” Unsatisfied with the response, he sent five reminder emails in March 2023, but the bank did not provide any information about the action taken on his subsidy application.
Complaint Filed Before Consumer Commission
Tandel then approached the Navsari Consumer Disputes Redressal Commission. He requested payment of the ₹2.35 lakh PMAY subsidy, reimbursement of ₹1.40 lakh in additional interest that he had paid due to the missing subsidy, and compensation for the inconvenience caused to him.
His lawyer argued that the bank had failed to forward the subsidy application to the government. It was also argued that if there had been any problem with the application, the bank would not have approved the loan under the PMAY scheme.
Bank’s Defence Rejected
Bank of Baroda argued that it only provided the home loan and was not responsible for approving the PMAY subsidy, as the subsidy is granted by the government. The bank also claimed that the borrower had violated the PMAY eligibility conditions.
However, the commission rejected this argument. It noted that the PMAY application clearly stated that the borrower did not own any immovable property. The commission also found that the bank failed to produce any evidence showing that it had taken the necessary steps to process the subsidy application with the government.
Commission Finds Deficiency in Service
The commission observed that the bank neither informed the borrower about any defects in the application nor produced any records showing that it had followed up with the government regarding the subsidy. At the same time, the bank continued collecting the loan EMIs, which showed that it had treated the loan application as valid.
The commission concluded that the borrower lost the PMAY subsidy solely because the bank failed to process the application properly. It therefore directed Bank of Baroda to pay ₹2.35 lakh towards the PMAY subsidy, ₹1.40 lakh towards the additional interest burden, both with 9% interest, along with ₹5,000 as compensation and litigation costs.
