Bank ordered to pay Delhi-based company for refusing to deposit Rs 3.2 crore during demonetisation

NEW DELHI: In 2016, Axis Bank refused to allow a Delhi-based company to deposit Rs 3.2 crore in cash during demonetisation. The National Consumer Disputes Redressal Commission has now ordered the bank to pay the amount with 6% interest to the company as its cash turned into "worthless paper" when the deadline passed and suffered "irreversible loss".

The bank defended its decision on the ground that the deposit was suspicious, but the commission said the bank unilaterally branding the complainant, Procure Logistics Services Private Limited, as a high-risk account and denying deposit of cash in their own KYC-compliant account during the critical time window violated govt policies and RBI notifications.

Even assuming that the OP Bank entertained any doubt or suspicion, the lawful course open to it was to accept the deposits, bring the funds within the formal banking channel and thereafter facilitate post-transaction reporting and investigation by the designated authorities," a bench of J Rajendra and A K Mendiratta said in its order.

"...This deprivation was not the result of any adjudication by a competent authority but flowed solely from the unilateral action of the Bank, despite the complainant's readiness and willingness to comply with all regulatory requirements. In view of the above, the bank is liable to compensate for the loss it caused to the complainant to the extent of the specified bank notes worth Rs.3,19,58,500," it said.

Procure Logistics Services Private Limited, had deposited bank notes worth Rs 1.3 crore on various dates during the demonetis-ation but was barred from making further deposits, leaving it with Rs 3.2 crore in unaccepted notes.

Correspondence "shows that during the notified time window, the complainant had disclosed the availability of cash-in-hand with the firm as reflected in its audited accounts, furnished audited balance sheets of the preceding years to the officials of OP Bank and repeatedly sought to deposit the amounts. Evidently, this refusal was not based on any specific RBI or Govt Notifications, or any communicated deficiency in KYC or other statutory/procedural non-compliance," the commission said.