Bank fined for overcharging loan processing fee

Tribune News Service

Chandigarh, March 30

The District Consumer Disputes Redressal Commission , UT, has directed the Sector 34-A branch of State Bank of India to pay a compensation of Rs 20,000 to a Mohali resident for charging extra processing fee for a loan. The commission also directed the bank to pay Rs 7,000 as litigation cost.

In a complaint filed before the commission, Sachin Jain, the proprietor of a firm, stated that he approached the bank for a loan of Rs 5 lakh under the MUDRA Scheme. He said he was asked to deposit Rs 18,000 in the name of bank’s processing fee and also asked to provide collateral security against the proposed loan. He was also made to pay Rs 2,500 as legal fee towards the collateral property. He said in July 13, 2017, a loan of Rs 5 lakh was credited to his account. He said later, he came to know that the bank charged the processing fee for a Rs 12-lakh loan. He claimed that the loan had been arbitrarily sanctioned for Rs 12 lakh and not as sought (up to Rs 5 lakh only).

On the other hand, the opposite party (bank) denied the charge and claimed that the complainant sought a term loan of Rs 12 lakh. In support of it, he submitted his project report mentioning requirement of a term loan of Rs 12 lakh and therefore, the bank sanctioned the term loan facility of Rs 12 lakh on July 12, 2017. However, the complainant got only Rs 5 lakh disbursed out of the sanctioned term loan. The complainant falsely alleged that he had availed himself of a loan of Rs 5 lakh only under the MUDRA Scheme.

After hearing of the arguments, the Commission consisting of Pawanjit Singh (president) and Surjeet Kaur and Suresh Kumar Sardana (members) stated that on perusal of the documents, it was observed that a processing fee of Rs 18,000 was charged by the bank whereas only Rs 7,262 as fee were payable.

The Commission stated it was also observed that an amount of Rs 10,738 was credited back by the bank in the account of the complainant on July 26, 2018. This itself is an indicative that the opposite party charged an excess amount towards processing fee of the loan.

By charging an extra amount of processing fee, the opposite party indulged in an unfair trade practice, causing a great mental agony and harassment to the complainant for which he deserves to be compensated suitably.

In view of this, the Commission directed the bank to pay a compensation of Rs 20,000 for charging extra processing fee and Rs 7,000 as litigation cost.

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