Bank penalised for charging processing fees–Loan declined
IndusInd bank penalised for not approving loan after taking processing charges.
A bank in Udaipur has been penalised for charging processing fees and later refusing to give loan to a customer. IndusInd Bank has been penalised with 25000 rupees by Permanent Lok Adalat.
Himanshu Duggar resident of Syphen circle applied for a loan of 2 crore rupees in IndusInd Bank, Panchwati. The bank asked him to pay the processing charge of 4 lakh rupees. They said that the loan amount can be processed only after the payment of processing fee. Himanshu Duggar paid the processing charge to the bank, but he was refused the loan later. Giving the reason for declining his loan application, the bank management said that he was a declared defaulter by other banks.
Duggar approached court for this purpose. President of Permanent Lok Adalat KB Katta along with members Sushil Kothari and Brijendra Seth said that the business policy of bank was faulty. The court also said that banks are distinguished financial institutes who should not merely work with a professional attitude. It is the duty of banks to satisfy their customers.
The court also said that IndusInd Bank has gone against guidelines of banks. If a customer has been found as defaulter, then the loan application should be cancelled. No bank is supposed to take processing fee if the loan is not being approved.
Since IndusInd Bank charged processing fee without the work done, they have been notified to reimburse the amount to Duggar within one month. They have also been instructed to pay interest on 4 lakh rupees. Apart from this, the bank has been penalised with 25000 rupees out of which 15000 rupees will go to Legal Services Authority fund. Balance 10000 rupees will be given to Himanshu Duggar.
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