The National Consumer Disputes Redressal Commission found Axis Bank guilty of poor service and told the bank to pay a Delhi based transportation company Rs 3.19 crore within 30 days. The order followed Procure Logistics Services Pvt Ltd’s complaint to the commission about the private sector loan.
The ruling was made by a bench that included Anoop Kumar Mendiratta as the judge member and AVM J Rajendra as the sitting member. After reviewing the facts of the case and the reasons, the panel concluded that the bank did not provide the company with proper financial services. The order came out on March 10.
The ruling says the bank must pay the amount plus simple interest of 6% per year from December 30, 2016, until the full payment is made. The commission also said that the payment had to be made within two months. If the bank doesn’t pay by the due date, the interest rate will go up to 9% per year for the time they were late.
Dispute about the time of demonetization
The disagreement dates back to when the currency was taken away in 2016. When the government announced on November 8, 2016, that some cash notes would no longer be valid, people and companies had a certain amount of time to put the old notes into their bank accounts.
According to the transportation company, Axis Bank would not accept payments of demonetised cash during this time. The company says that it tried to put the cash into its account several times at the bank but was turned down each time.
The commission saw that the business tried to put the cash more than once, but the bank kept turning it down. The company had money that couldn’t be deposited or traded after the due date, since the end of the notes had passed.
The commission says the bank should have taken the deposit
As part of the know your customer rules, the commission pointed out that the company was trying to put the money into its own bank account during the meeting. There was no good reason for the bank to refuse the payment within the time limit, the bench said.
The order said that if the bank had any questions or fears about the payment, it could have taken the money and then told the right people about it so that it could be looked into further. The bank didn’t do that, though; they just wouldn’t take the payment.
The commission said that banks could not refuse these kinds of payments during demonetisation because the account user had to be verified and the deposit had to be made within the time range allowed by the government.
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The company was going to lose money
As the bank said no, the shipping company missed the chance to pay the devalued cash before the deadline. The company held cash that was no longer legal after the payment window closed. It could no longer be used.
The commission said this directly caused the company to lose money. It said that the bank’s actions stopped the company from utilising its sole legal chance to place the ended notes within the allotted time frame. The business lost money because the money it had could not be traded or transferred after the deadline.
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The commission stresses that banks are responsible
The committee also said that one of the most basic things banks do is accept deposits into a legal account. Banks are required by law and rules to offer this service in a manner that complies with those rules.
It also said that if a bank decides to turn down a transaction that is normally allowed, it must give a good reason supported by rules set by regulators. In this case, the committee judged that the bank did not give a good reason.
According to the commission, these facts make it clear that the bank’s actions are a breach of the Consumer Protection Act, 1986. The bank has been ordered to repay the shipping company for the money it lost when it refused to accept the deposit.
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