You should have given instructions fir auto renewal of FD
2) in absence of instructions bank would not auto renew FD
3) your claim for FD interest retrospectively would not be entertained
Retrospective FD Interest Rate Denied by Syndicate Bank
In 2013, My mother who is a Sr Citizen now had made FD deposits amounting to 13,30,000/- in Syndicate bank for 1 year. There were no other instructions on the FD deposit form as all the banks automatically renew the FD for the same period in absence of any instructions. In Feb 2020, when i visited the bank to withdraw some cash, the bank informed that all the FD's were matured in 2014 and closed and they would only give SAVINGS BANK ACCOUNT INTEREST Rate as per today's date instead of FD interest rate from 2014 till date as FD's were not physically renewed by giving specific instructions to the bank even though the deposits have been with the bank for last 7.5 years and were never withdrawn. Also the maturity amount was never credited by the bank post maturity in 2014 into the savings account from which these FD's were made as my mother got her passbook entry done regularly. We assumed that FD's are being renewed automatically just like a regular practice by all the banks . The FD's were matured and closed but the maturity proceeds were never transferred to the savings account even if the auto renewal instructions were not mentioned in the FD deposit form as it would have reflected in the pass book. There was no way for her to determine that FD's are not being auto renewed as there was no communication from the bank as well in last 7.3 years. As per them , they did not have auto renewal feature in their banking software and hence did not auto renew the FD's automatically . We have been requesting the bank for RETROSPECTIVE RATE OF Fixed deposit Interest rate which was applicable for the respective financial year whereas the bank has credited the existing Savings interest rate which is a fradulent practice. I raised a complaint with RBI Ombudsman but that was also closed by RBI without any discussion or looking into the detailed issue. Please suggest if i should file a case in consumer court to get this grievance addressed as the bank has been giving us a runaround for the retrospective rate of interest which is my mother's primary source of income in this old age.
Asked 5 years ago in Civil Law
15 Answers
Bank have their own FD rules, No compulsory auto renewal RBI rules. If there is no instruction to the bank for renewal or transfer of fund and bank unable to find the investor within 14 days after maturity, it will automatically renew the FD at the existing rate of interest.
It was on bank to inform the party within 14 days on maturity. So bank also have defaulted. Can approach consumer court because bank either had to renew it or to transfer the fund.
You may file writ petition in Delhi High Court under Articles 226,227 of Indian Constitution 1949 for Mandatory follow up in deposit auto renewals as per Bankning Laws applicable to all commercial bank under writ of MANDAMUS directing the Bank to apply general rules in case of your other as well.
Syndicate Bank is a Nationalized Bank which is governed under Commercial Banking Services, Operations and Laws for auto renewals of deposit of customers in case no response for renewal.
File a complaint with the banking ombudsman.
If the bank is a scheduled public sector bank then you can file a writ petition in the High Court challenging the decision of the bank as well as the RBI Ombudsman
writ petition is a quicker and cheap relief than a consumer court complaint
Yes, you can file case against bank in the consumer forum and lower court of your area. Here bank at-least has credited FD amount into your mother's saving account. How they had kept amount laying without any effect in the bank. You can cross them how and what entry is shown their Bank's Balance sheet each year at the end audit report for March closing.
Either they have to show amount as FD or transferred to Saving Account. If the Amount is not reflecting in the saving account in regular entries than Bank should provide the FD rates till date.
If you want I can provide you citations like your cases.
- As per rule , the depositor has to mention in the form that after maturity the amount be transferred to a specific savings bank account.
- Further, the depositor can indicate in the form that the amount be renewed after maturity , and the longest tenor for an FD is 10 years.
- Further , if noting is mentioned in terms of transfer of funds or renewal post-maturity, the as per Reserve Bank of India guidelines, if the investor is tracked within 14 days and wishes to continue with the FD, the deposit can be renewed and interest will be calculated from the very day of the maturity period.
- Further , if there is no instruction to the bank and it is unable to find the investor within 14 days after maturity, it will automatically renew the FD at the existing rate of interest.
- Hence, the bank is liable to pay the interest rate not as per first fixed deposit by you, but the existing rate which was prevailed in that year , when bank should auto renewed the same.
- If bank not paying the interest , then you can approach Consumer court on the ground of deficiency of serves.
You can file a complaint with consumer court for the same. You can claim interest and compensation
If there are no such rules being followed by the bank in the year 2013 to automatically renew the FDs and without any instructions from the customer, the bank do not have rights to renew the FD automatically.
Your assumptions cannot be rules.
Neither the RBI nor the banking ombudsman can come to your rescue when the bank is not found at fault.
The bank's offer to give savings bank interest for the amount held by them cannot be disputed neither you can demand FD rate of interest that too with retrospective effect when the rules do not permit the bank to do such things.
In my opinion, you may better withdraw the entire amount immediately.
The consumer case also may not be maintainable because the bank will strongly defend on the basis of the rules and other issues in their favor, you may spending money, time and energy unnecessarily on this.
You have the option of filing complaint before consumer forum or Banking Ombudsman.
1. Well assumption alone may not be sufficient to deal with banking policies.
2. In many Public Sector Banks unless you give a written instructions to renew the FDs it would not be automatically renewed and nor credited to the savings account.
3. It will remain on the FD account only until you produce the hard copy of the FDR and give a further written advice.
4 . Therefore no wrong has been imputed against the bank.
Dear Sir/Madam,
You are suggested to serve a legal notice and then file the suit in the consumer court against the bank.
File a complaint in the banks ombudsman
Yes you should definitely file case before consumer forum because it was duty of bank to transfer the funds in FD to savings account when the FD was matured so that you can use that fund to some other place if not for renewal of FD.
You have a genuine case in which the bank has neither transferred the interest on fd and has nor is giving you the fd interest rate due to alleged non aito renewal. File a complaint against the bank in the consumer forum.
