Chhattisgarh consumer court slaps 6% per annum interest on public sector bank for overcharged subsidy loan | Raipur News
RAIPUR: The Chhattisgarh State Consumer Disputes Redressal Commission has found the State Bank of India (SBI) deficient in its services in a case related to an agricultural term loan subsidy. The bench, comprising President Justice Gautam Chourdiya and Member Pramod Kumar Varma, directed SBI to pay 6% per annum interest on excess interest charged on a subsidy amount from 23 August 2016 to 31 July 2021.
The complainant had applied to the Agricultural Machinery Department, Bilaspur, under a Central Government scheme to establish an agricultural machinery bank. A loan of Rs 11,20,000 was sanctioned, including a government subsidy of Rs 7,50,000, leaving the complainant to repay Rs 3,70,000 in annual instalments of Rs 46,250 over eight years, plus interest. The subsidy was credited to the bank in 2014 but was only adjusted to the loan account in 2016. However, SBI continued to charge interest on the full loan amount, including the subsidy, until 2021.
Upon noticing the excess interest charged, the complainant issued a legal notice to SBI on 25 July 2022. As the bank did not respond, a complaint was lodged with the Banking Ombudsman on 12 April 2023. SBI admitted to a system error that led to an excess interest charge of ₹2,58,000, which it refunded on 31 July 2021, the day the loan account was closed. The bank argued that the complaint was time-barred, as the cause of action arose on 31 July 2021, making the 2023 filing beyond the limitation period.
Based on an expert report and bank statements, the District Commission found that Rs 47,364.68 in excess interest remained unadjusted even after SBI’s refund. The bank was ordered to pay this amount, along with compensation and litigation costs, in partial favour of the complainant.
Both parties appealed to the State Commission. The complainant defended the Chartered Accountant’s calculation of excess interest and sought a higher award, while SBI challenged it as arbitrary, stating that interest had been included beyond the relevant period (up to 20 March 2024). The bank reiterated that Rs 2,58,578 had already been adjusted on 31 July 2021, as upheld by the Banking Ombudsman, and sought dismissal of the complaint.
Upon reviewing the loan documents, the Commission noted that the subsidy had a three-year lock-in period. The loan was sanctioned on 13 September 2013, and the subsidy was properly adjusted on 23 August 2016, clearing the bank of any delay-related deficiency. However, SBI admitted to charging interest on the subsidy from 2014 to 2016 due to a system failure. Although this was reversed in 2021, the Commission ruled that the correction should have been made on 23 August 2016, when the subsidy was appropriated, thereby confirming a deficiency in service.
The Chartered Accountant’s calculations, which included interest beyond 2021, were deemed excessive. The Commission determined that the complainant was entitled to 6% per annum interest (similar to fixed deposit rates) on the ₹2,58,578 excess interest, for the period from 23 August 2016 to 31 July 2021.
The State Commission partly upheld the complainant’s appeal, dismissed SBI’s appeal, and modified the District Commission’s order.
