Canara Bank told to pay Rs 50,000 to Vizag man for service deficiency

Visakhapatnam: The District Consumer Redressal Commission-II has directed Canara Bank (erstwhile Syndicate Bank) to pay ₹50,000 compensation to a customer in Vizag city for deficiency in service, unfair acts, and causing mental agony. The commission also ordered the bank to pay ₹10,000 towards legal costs.Complainant MVS Pavan Kumar had availed a ₹20-lakh housing loan in 2016 from the Naiduthota branch with a 20-year repayment period at a floating interest rate. His EMI was initially fixed at ₹18,880 and later increased to ₹20,000 at his request. Payments were regularly deducted through ECS from his HDFC salary account. In Oct 2018, Kumar paid an additional ₹1 lakh, requesting it be adjusted against the principal. However, the bank credited the sum into an "advance account" without intimation.After resigning from employment in Dec 2019, ECS deductions stopped. Kumar paid EMIs in cash for three months and later arranged deductions from his savings account with Canara Bank. On verification in August 2020, he discovered that excess EMIs and the ₹1 lakh were not adjusted towards the principal but kept in a separate account without interest. Despite repeated requests, the bank failed to rectify the issue and even classified him as a defaulter for three months.The bank denied the allegations, claiming all payments were duly accounted for and proportionately reduced the outstanding loan. However, the commission found deficiency in service and unfair trade practice. It directed the bank to furnish a certified recalculated statement, treating the ₹1 lakh and excess EMIs as principal reduction. The bank must adjust the loan account accordingly or refund the amount with 6% interest from Oct 2018 to Sept 2020.The ruling underscores consumer rights in financial transactions and accountability of banks in maintaining transparency.