A consumer commission in Nagpur has ordered State Bank of India (SBI) to pay Rs 5 lakh to a widow despite a six-year delay in filing the insurance claim. The commission said that mental trauma after the sudden death of a spouse is natural, and it can take time for a person to recover from such grief. So, if a person has filed a claim application after 6 years then also the application should be reviewed.
The District Consumer Disputes Redressal Commission in Nagpur said that a bank cannot use the 90-day claim filing rule as an excuse when it has failed to inform customers about their rights and benefits.
Calling the bank’s action “unjust” and a “deficiency in service,” the commission directed SBI to pay the insurance amount of Rs 5 lakh along with 6 per cent annual interest from September 5, 2019, the date when the complaint was filed.
The commission also said that if a bank claims that insurance cover is not available for a particular debit card, then it must clearly provide the conditions and proper documents supporting that claim. It observed that other cardholders were getting insurance benefits without paying any extra fees, and treating customers differently under similar circumstances was unfair.
Apart from the insurance amount, the commission also ordered the bank to pay Rs 10,000 towards mental harassment and legal expenses.
According to the complainant, her husband had an account at the bank’s Tri Junction Cantonment branch in Nagpur. She said the bank was offering insurance coverage of up to Rs 5 lakh to eligible debit cardholders. However, neither she nor her husband was informed about this insurance facility by the bank.
Her husband died in a road accident in September 2013. The woman said she suffered severe mental trauma after his sudden death and took time to recover from the grief.
Later, after learning about the insurance scheme, she approached the bank on March 26, 2019, to claim the benefit. She submitted all required documents, but the bank kept the matter pending and did not take any decision.
After failing to get relief from the bank, she approached the consumer commission seeking the insurance amount. She also demanded Rs 50,000 compensation for mental and physical suffering and Rs 20,000 for legal costs.
In its reply, SBI claimed that the complaint was false and baseless. The bank said it does not separately inform debit cardholders about insurance benefits. It also argued that the deceased was using a ‘MasterCard Classic’ debit card, which did not have insurance coverage. The bank further said that the claim was not filed within the mandatory 90-day period.
After reviewing the case, the commission observed that it was natural for the woman to suffer mental shock after her husband’s sudden death and take time to recover.
The commission rejected the bank’s argument that the card was not covered under insurance. It said the bank failed to provide any clear document proving that the ‘MasterCard Classic’ card was excluded from insurance benefits.
On the other hand, documents submitted in the case showed that insurance coverage was available for other debit cards. However, no clear exclusion clause for the ‘MasterCard Classic’ card was mentioned anywhere.
The commission said that if the bank wanted to deny insurance for a specific card, it should have clearly informed customers and provided proper documentation.
It also noted that insurance benefits were given to other cardholders without charging any fee. Therefore, giving different treatment to customers under similar situations was unfair and amounted to a deficiency in service.
The commission further observed that there was no evidence to show that the bank had informed the deceased or his family about the debit card insurance scheme.
It said that if proper information had been given, the deceased or his family members could have taken the necessary steps on time.
The commission finally held that rejecting the claim only because it was not filed within 90 days was not justified, and SBI’s action amounted to unfair service.
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