SBI Ordered to Pay ₹1.7 Lakh for Wrongly Dishonouring EMIs — A Big Win for Banking Consumers

 SBI Ordered to Pay ₹1.7 Lakh for Wrongly Dishonouring EMIs — A Big Win for Banking Consumers

Delhi, October 2025 | By Public Right Action Network (PRAN)

In a major victory for consumer justice, the Delhi State Consumer Disputes Redressal Commission (DSCDRC) has held the State Bank of India (SBI) liable for deficiency in service after it wrongfully dishonoured a customer’s EMIs despite sufficient balance in her account.

The Commission directed SBI to pay ₹1.7 lakh in total compensation, reaffirming that digital automation does not absolve banks of responsibility for service errors that harm customers.

 Case Summary

The complainant, Ms Chhaya Sharma, maintained a savings account with SBI – Karawal Nagar branch and had taken a car loan of ₹2.6 lakh from HDFC Bank, repayable in 48 monthly EMIs of about ₹7,054 each through an ECS (Electronic Clearing System) auto-debit mandate.

Despite having sufficient funds, 11 EMIs bounced — three marked “insufficient funds” and eight “invalid account”. SBI also levied ₹4,400 as bounce charges.

The District Consumer Forum dismissed her complaint, but on appeal the Delhi State Consumer Disputes Redressal Commission, presided over by Ms Bimla Kumari, reversed the decision.

Key Findings of the Commission

• The same ECS mandate was successfully used for other EMIs, proving the account details were correct.

• SBI could not produce evidence of insufficient funds or a faulty mandate.

• The repeated failure of valid transactions constituted deficiency in service under the Consumer Protection Act.

• The consumer cannot be penalised for the bank’s technical lapses or internal errors.

The Final Order

SBI was directed to:

• Pay ₹1,50,000 as compensation for mental agony and harassment;

• Pay ₹20,000 as litigation cost; and

• Pay 7 percent annual interest on the total amount if payment is delayed.

The District Forum’s order was set aside.

📄 Case Reference: Chhaya Sharma v. State Bank of India & Anr., Appeal No. FA/106/2011, Delhi State Consumer Disputes Redressal Commission (Order available at 24law.in PDF).

🔍 Why This Matters

This ruling sends a clear message — automation is no defence against accountability. When auto-debit systems like ECS or NACH fail despite sufficient funds, the bank remains liable.

For consumers, the judgment reinforces:

• The right to reliable banking services;

• The ability to claim compensation for financial and mental harm;

• The importance of maintaining documentation to support complaints.

🧩 What Consumers Should Do

1. Check and save account statements showing available balances on EMI dates.

2. Demand a written explanation from the bank for any failed transaction.

3. Escalate complaints:

   • Step 1: Bank’s internal grievance cell.

   • Step 2: District Consumer Disputes Redressal Commission.

   • Step 3: RBI Banking Ombudsman (for systemic failures).

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🗣️ PRAN Perspective

At Public Right Action Network (PRAN), we believe financial consumers deserve the same protection as any other citizen. This case strengthens accountability in the digital banking ecosystem — reminding service providers that trust and transparency must remain at the heart of fintech progress.

PRAN works to make law and policy understandable and actionable — bridging the gap between citizens, regulators, and justice systems.

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