How to Sue a Bank for Negligence in India

Author - Associate Runa Jasia

People deposit the amount of money and conduct transactions from their bank account. People do believe blindly in their bank branch. There are government bank and private ones. It is unfortunate when a bank cheats its customers. People go there to save the money of their lifetime. If something wrong happens with that, then it becomes too miserable for that person particularly. This is a clear violation of the rules. It’s reasonable to be concerned about how financial institutions treat a person. Bank do charge account maintenance fees, ATM fees, Business loan fees, etc. The costs are meager, but it does not mean that they have the right to cheat anybody. 

If there are any issues or challenges faced by a person, then the person must take it seriously and give this issue some amount of time. Can you sue a bank for negligence?

How to sue a bank in India:

1.    Knowing the issue

Before going any further, an individual must understand what the issue is and how it can be solved, that person must know how serious the problem is and how much time bank is taking to resolve it. For example: If a person swiped their debit/credit card and their money is deducted without actually paying off to the shop. In this case, the bank must return the money in a given amount of time back to their bank account. If it is taking much time and the amount was huge, it seems to be a big issue. There are various reasons for which a person wants to sue a bank. Such as failure to issue or delay in issuance of drafts, pay orders or bankers’ cheques, delay transactions, etc.

2.    Talk with the manager

The person should communicate clearly with the bank employees regarding their issue. If the employees delay the issue, then the person must go and talk to the manager of the bank. Many times talking with the manager of the bank can be the solution to the problem. If the manager continues to provide false hope every time, then that person must understand that they are not taking their issue seriously. Compensation for bank negligence can be discussed.

3.    Prepare to take legal action against the bank

How to take legal action against bank? Start collecting the required documents which will help make the case of an individual stronger. The person must make a file with the relevant documents attached to it. Written proofs are essential in such cases. 

4.    Filing a complaint

The person can report an FIR (first information report) against the bank. They can also take the help of a skilled lawyer. RBI (Reserve Bank of India) introduced The Banking Ombudsman Scheme, 2006 to deal with such situations. An ombudsman is an individual who has been appointed to look into complaints about an organization. Modifications were made in the year 2017 of this scheme. A bank ombudsman is a senior officer appointed by the RBI. Few people are appointed as an ombudsman. Their work is to address some issues such as:

• When they are not able to provide the payment or collection of cheques, bills, drafts, etc.

• When they are delaying the payment etc.

There are certainly more areas. But there is also a limit on the amount of compensation for bank negligence that has to be provided by the bank. INR 20 lacs is the limit of the compensation amount. 

This complaint can be written online on the website of the RBI or offline by the bank customer. But the complaint will not be acceptable in some conditions:

• If a person has not approached for redressal of their grievance first.

• The subject matter of the complaint is not within the ambit of the Banking Ombudsman.

• The received complained against is not covered under the scheme. 

Also, there is no fee taken by the bank ombudsman for solving and registering any complaints. The person can also withdraw or modify their appeal. There are currently twenty-five areas in banking ombudsman in the state capital of India. They will register the complaint, and it will be processed. It will take some time and then the further proceedings will take place. The bank has to give the amount of compensation for bank negligence to their customer as per decided by the bank ombudsman. There are also conditions mentioned in this scheme before filing a complaint against a bank. They are:

• If there is no reply from the bank manager within one month of complaint of the customer,

• If the bank does not approve the complaints or rejects it,

• Also if the provided complaint is not resolved satisfactorily in the bank customer’s view.

So these conditions must be fulfilled before suing a bank filing any complaint to the RBI. One must try everything before taking such legal action against a bank, but also one must not hesitate to ask for justice.