PNB Housing Finance Ordered to Pay Compensation for Forcing Customer to Buy Insurance Policy with Home Loan

PNB Housing Finance Limited has been directed to pay a compensation of Rs 58,000 after a Jalandhar-based couple filed a complaint against the company for forcing them to buy an insurance policy along with their home loan.
The Complaint
Hamesh Kumar and his wife, Ramandeep, took a home loan from PNB Housing Finance to purchase a house. However, they alleged that the company compelled them to buy an insurance policy alongside the loan. The couple claimed that they were not given the policy documents in time, and when they eventually received them, they discovered that the insurance did not serve the purpose they expected.
According to the couple, the policy only covered accidents for three years, whereas their loan tenure was 20 years. Feeling misled, they requested the cancellation of the policy but received no response from the company. Left with no other option, they approached the Consumer Commission for redressal.
Commission’s Decision
After examining the case, the Consumer Commission found that PNB Housing Finance had violated guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI). These guidelines state that customers must receive policy documents promptly and be allowed a 15-day review period to decide if they wish to retain the policy.
The Commission noted that the late delivery of the policy documents denied the couple the opportunity to review or cancel the policy within the stipulated time.
Compensation Ordered
In its ruling, the Consumer Commission ordered PNB Housing Finance to refund the Rs 38,000 paid for the insurance policy. Additionally, the company was instructed to pay Rs 20,000 as compensation for the inconvenience and mental agony caused to the complainants.
Significance of the Ruling
This decision highlights the importance of financial institutions adhering to regulatory guidelines and ensuring transparency in their dealings with customers. It also serves as a reminder that customers have the right to review and cancel any financial products they feel are not suitable for them.
For Hamesh Kumar and Ramandeep, the ruling offers some relief after their prolonged struggle to seek justice.