SBI Ordered to Pay Retired Scientist Rs 15 Lakh Deposit with Interest, Rs 25,000 Compensation by Consumer Commission
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The District Consumer Disputes Redressal Commission-III, Hyderabad, has directed the State Bank of India (SBI) to return a ₹15 lakh deposit to a retired scientist along with applicable interest. The commission found a deficiency in service on the part of the bank for failing to inform the customer about the maturity of his deposit and the option to extend it. The bank has also been ordered to pay ₹25,000 as compensation for mental agony and inconvenience and ₹10,000 towards litigation expenses.
The case relates to Ashwani Kumar Sangamker, a retired scientist who invested ₹15 lakh from his retirement benefits in the Senior Citizens Savings Scheme (SCSS) through SBI’s Barkatpura branch in Hyderabad on December 13, 2018. The deposit carried an interest rate of 8.5% and was scheduled to mature on December 12, 2023.
According to the complaint, Sangamker believed that his deposit had been automatically renewed because SBI’s online portal displayed a revised maturity date of December 12, 2028. However, the portal showed the interest rate as zero percent. This created confusion about the status of his investment and the interest payable on the deposited amount.
In March 2025, Sangamker approached the bank seeking clarification about the deposit and payment of interest. However, he was informed that the deposit could not be extended because he had not submitted an extension application within one year of its maturity.
The retired scientist alleged that the bank had neither informed him about the maturity of his deposit nor transferred the matured amount to his savings account. He subsequently approached the consumer commission, alleging deficiency in banking services.
During the proceedings, SBI argued that the Senior Citizens Savings Scheme did not provide for automatic renewal of deposits. According to the bank, customers were required to submit an application for extension within one year of maturity. Since Sangamker approached the bank after the prescribed deadline, his request for extension could not be accepted.
The bank also stated that the zero-interest rate displayed on its online portal was caused by a technical glitch. SBI maintained that the customer was eligible to receive post-maturity interest at the applicable savings account interest rate.
After examining the documents and arguments presented by both sides, the consumer commission observed that the customer had signed documents acknowledging the terms and conditions of the scheme. These included the requirement to apply for an extension within one year of maturity. The bank’s records also confirmed that the deposit had matured and that no extension application had been submitted within the prescribed period.
However, the commission found that SBI had failed to properly inform the customer about the maturity of his deposit and the available extension option. It also questioned the bank’s handling of the money after maturity, particularly the display of zero interest on its online portal.
The commission referred to the Reserve Bank of India’s directions regarding matured term deposits. It observed that when a term deposit matures and the amount remains unpaid, the money is eligible to earn interest at the savings deposit rate or the original contracted deposit rate, whichever is lower.
The commission noted that SBI had retained the customer’s money after maturity without establishing any valid contractual or statutory basis for treating the deposit as earning zero interest.
The bench, comprising President M Ramgopal Reddy and members D Sreedevi and J Shyamala, concluded that the bank had committed a deficiency in service by failing to inform the customer about the deposit’s maturity and the possibility of extending it for another three years.
In its order dated October 7, 2026, the commission partly allowed the complaint and directed SBI to pay Sangamker the principal deposit amount of ₹15 lakh along with interest at 8.5% up to the original maturity date of December 12, 2023. For the period after maturity, the bank was directed to pay interest at the applicable savings deposit rate until the amount is paid.
Apart from the deposit and interest, the commission ordered SBI to pay ₹25,000 as compensation for the inconvenience and mental agony suffered by the customer. The bank was also directed to pay ₹10,000 towards litigation costs.
The consumer commission directed SBI to comply with the order within 45 days from the date of receiving it.
The case highlights the importance of proper communication between banks and customers regarding the maturity of deposits, particularly those belonging to senior citizens. It also underlines the responsibility of banks to correctly account for interest on matured deposits and provide customers with accurate information about their investments.
