Date of Filing: 08-08-2017 Date of Final Order: 28-02-2018
Sri Debangshu Bhattacharjee, Member
The Complainant, Sri Tulshi Ram Taparia, S/o. Late Omchand Taparia, has filed the present case u/s 12 of the C.P. Act, 1986 praying for issuing direction upon the O.P to refund a sum of Rs.1,20,000/- to the Complainant, Rs.60,000/- as compensation for mental pain & agony and litigation cost of Rs.10,000/- with other reliefs.
Briefly stated the facts of the case can be gathered from the case record is that the last date for depositing money was fixed on 30/12/2016 due to denomination of the Govt. of India and the R.B.I. directed to deposit to the customer to submit all the denomination of Rs.500/- and Rs.1,000/- and also announced that beyond 30/12/2016 no denomination of Rs.500/- and Rs.1,000/- will be accepted by the Bank and the same will be spoiled. The Complainant has Rs.1,20,000/- of Rs.500/- denomination. At the relevant time, the Complainant was staying at Rajasthan for his treatment purpose. But the Complainant rushed at Dinhata with his ill health to comply the guideline of R.B.I. and the sum of Rs.1,20,000/- of Rs.500/- denomination deposited to the O.P. Bank on 30/12/2016 at about 1.00 p.m. against his account keeping all formalities and the O.P. Bank also accepted the sum of Rs.1,20,000/- by affixing Bank’s seal with signature of the person who receiving the said money. After that the O.P. Bank informed the Complainant over telephone to come at the Bank at about 5.00 p.m. Accordingly, the Complainant went to the O.P. Bank and the O.P. Bank asked the Complainant to produce the pay-in-slip by which he deposited a sum of Rs.1,20,000/-. The O.P. Bank returned the same by remarking “Cancelled” on the said pay-in-slip on the ground that KYC of the Complainant is not updated. Thus, the sum of Rs.1,20,000/- of the Complainant has been spoiled.
The Complainant further stated that the transaction dates on 30/12/2016, 29/12/2016, 28/12/2016, 27/12/2016, 26/12/2016, 25/12/2016, 24/12/2016 & 10/12/2016 reveals that the transactions were properly made with the Bank from which it is clear that the Complainant has deposited his KYC at the Bank otherwise said transactions on the forgoing days were not possible. Therefore, the ground of the O.P. Bank for cancellation of the Complainant’s deposit was not updating of KYC was totally illegal, false and fictitious.
On 24/04/2017 the Complainant filed a written complaint regarding such unfair activities of the Bank against the O.P. In reply, on 11/05/2017 the O.P. Bank informed the Complainant that due to non-updation of KYC, the deposit of the Complainant was not possible. Thereafter, on several times, the Complainant went to the O.P. Bank but did not get any response. Thus, the Complainant has suffered from huge monetary loss and as well as mental pain and agony.
Hence, finding no other alternative the Complainant has filed the present case against the O.Ps seeking reliefs and compensation as incorporated in the prayer portion of the complaint.
In the present case the notice upon the O.P. Bank has been duly served. On behalf of the O.P, the Ld. Advocate, Sri Surajit Dutta appeared by filing W/V and contested the case contending inter-alia that the present case is not maintainable in its present form as well as in law. This O.Ps made denial of some specific allegations against him saves and except the statements which are matters of record.
The prime contention of this O.P is that as per RBI guide lines there was a restriction in case of deposit of old Rs.500/- and Rs.1,000/- notes in case of non-KYC complaint account and the Complainant’s Savings Bank Account being No.11262701697 was a Non-KYC account. The Complainant deposited 240 nos. of old Rs.500/- notes amounting to Rs.1,20,000/- only in his Savings Bank account and after receiving the said amount at the time of processing when posted and verified the deposit slip by the S.B.I. Bank Authonty at that time it was found that the Complainant’s Savings Bank Account being No.11262701697 was a non KYC complaint account for which the O.P. Bank has returned back the said total amount of Rs.1,20,000/- only to the Complainant and the Complainant received the same without any complaint. Thereafter the O.P. Bank also cancelled the said deposit Slip with a note “KYC not updated”.
The O.P. Bank further contented that as per R.B.I. guide lines “RBI removes Rs.5,000/- cash deposit limit for KYC compliant accounts - Livemint RBI removes Rs.5,000/- cash deposit limit for KYC compliant accounts An RBI notification earlier said deposits in bank accounts with old Rs.500/-, Rs.1000/- currency notes worth over Rs.5000/- can be made only once till 30th December. The restrictions on deposits in non-KYC compliant accounts still hold. Customers can deposit upto Rs.50,000/- in these accounts before 31st December”. The Complainant had not any objection regarding the said matter on that date before the O.P. Bank but after laps of four months, the Complainant filed one letter before the O.P. Bank on 24/04/2017 and after receiving such letter, the O.P. Bank has also reply his letter on 11/05/2017. After taking such initiative by this answering O.P has neither negligence nor any unfair trade practice. Therefore, the Complainant is not entitled to get any relief from this answering O.P and the O.P. Bank prayed for dismissal of this case with cost.
On the basis of above versions, the following points are framed for proper adjudication of the case.
POINTS FOR CONSIDERATION
- Is the Complainant a Consumer as per provision under Section 2(1)(d)(ii) of the C.P. Act, 1986?
- Has this Forum jurisdiction to entertain the instant complaint?
- Has the O.P any deficiency in service, as alleged by the Complainant?
- Whether the Complainant entitled to get any relief/reliefs, as prayed for?
DECISION WITH REASONS
We have gone through the record very carefully and perused the evidence on affidavit, written argument of the parties along with relevant documents and heard the argument of the parties at length.
Point No.1.
The Complainant deposited his money in his own account in the O.P bank. The Account number is S.B.A/C-11262701697. So it is clear the Complainant a Consumer of O.P bank as per provision under Section 2(1)(d)(ii) of the C.P. Act, 1986?.
Point No.2.
The Ld. Agent for the Complainant has submitted that this Forum has both territorial and pecuniary jurisdiction to entertain the complaint. In reply, the Ld. Agent for the OP submitted that this Forum has no jurisdiction to entertain the complaint as the Complainant is not a consumer in terms of section 2(1) (d) of the CP Act, 1986.
We have gone through the materials on record and considered the submission of both sides. On a careful consideration, we find that this Forum has both territorial and pecuniary jurisdiction to entertain the complaint.
Point Nos.3 & 4.
Both the points are taken up together for the sake of convenience and to avoid repetition.
“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption on our work. He is the purpose of it. He is not an outsider on our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so. Mahatma Gandhi (2 October 1869-30 January 1948)”.
Know Your Customer (KYC) is a process to identify the veracity of a customer’s identity as well residence proof. This is an integral part of establishing business relationship with a customer for banks and financial institutions. Additionally, the KYC process helps prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. Last, but not the least, KYC procedures also enable banks to understand their customers and their financial dealings better which in turn help them manage their risks prudently.
Banks and financial institutions grapple with the issues related to the KYC compliance. Non-compliance of KYC is a major challenge faced by the banks in India. There are two aspects of KYC compliance that banks need to monitor. The first aspect that they need to check is whether the employees are following the KYC guidelines properly or not. The second, but no less important, is the co-operation of customers. Without help from customers, it is difficult for a bank to build a robust KYC process.
The role of the customer is important in the KYC process at two critical steps: first, when the account is opened; second, when the ongoing process of KYC once business relationship has been established. While the first step of KYC is easy to monitor, it is in the ongoing process of KYC that many banks face challenge.
The guidelines of Reserve Bank of India (RBI) on KYC process states that banks should follow ‘risk-based’ approach of KYC process and classify customers into low, medium and high risk. The significance of classification lies in the fact that ongoing KYC process is driven by the classification. As per RBI guidelines, “Banks should introduce a system of periodical updating of customer identification data (including photograph/s) after the account is opened. The periodicity of such updating should not be less than once in five years in case of low risk category customers and not less than once in two years in case of high and medium risk categories. Such verification should be done irrespective of whether the account has been transferred from one branch to another and banks are required to also maintain records of transactions as prescribed”. Where the banks rely on the 'customer due diligence' (CDD) done by an intermediary, they should satisfy themselves that the intermediary is regulated and supervised and has adequate systems in place to comply with the KYC requirements. It should be understood that the ultimate responsibility for knowing the customer lies with the bank.
So considering the above guidelines, what should a bank do, say for a low risk customer who has failed to produce updated customer identification data? The Bank has two options. First, close the account, especially, if it has become dormant and has nominal balance. Second, the customer should be penalised for failing to submit KYC documents. A bank faces a challenge in intimating customers about the need to re-submit documents, after specified number of years, as many customers move from their initial residence and it also involves cost.
In this case, bank did not produce any document by which they can prove that on the specific date the KYC document of the complainant was not updated. Neither the bank previously informed the customer about the up gradation of KYC of his bank account. It is nothing but a gross negligence and deficiency in service from the side of the O.P bank.
On 30-12-2016 the bank canceled the deposit slip with a note that KYC not updated. (Annexure–B).The complaint case was filed on 08.08.2017. Within this period so many transactions has been made in the account of the complainant through NEFT, ATM withdrawal, interest credit and cash deposit self (Annexure–A). According to the document produced by the complainant it is established that the bank received the amount from the complainant with proper receipt (Annexure –B). At the time of receiving the amount the bank authority did not verify the account of the complainant. But after few hours at the time of account verification they saw that KYC document of the complainant was not updated. The bank authority called the customer and returned back the entire amount to the complainant by knowing the situation that 30-12-2016 was the last date of deposit of old currency notes in the bank. The OP bank has failed to prove that on 30/12/2016 the KYC of the complainant’s account was not updated.
The bank has not produced any document nor mentioned any date by which we can understand that the KYC of the complainant’s account was updated after 30-12-2016. Whatever may be the fact, the fact remains that a bank official received old denominations of rupees 120000/-against the bank account of the complainant and it is presumed that he verified the account of the complainant through their system. It should not be ignored that 30-12-2016 was the last date for receiving old denominations by bank. But, it is undoubtedly a deficiency on the part of the bank when it received the amount from the complainant by issuing proper receipt. It is not the case of the complainant that it requested the complainant to update his KYC on 30-12-2016 and the complainant could not follow the instruction of the bank.
The Complainant suffered a lot for inaction of the O.P. bank. Thus, deficiency in service cannot be ruled out against the O.P. bank.
As it is clearly proved that the complainant got back the deposited amount from the bank, the O.P bank should not be directed to refund a sum of Rs.120000/-but the Complainant is entitled to get relief with compensation from the O.P for deficiency in service. We think that compensation of Rs. 15000/- for deficiency in service and Rs.5000/- for litigation cost will meet the ends of justice.
In the result, the case succeeds in part.
Hence,
It is Ordered,
That the present Case No. CC/84/2017 be and the same is allowed on contest against the O.P. with cost of Rs.5,000/-
The O.P is directed to make payment of Rs.15,000/- to the Complainant as compensation for deficiency in service of the O.P. The entire order shall be complied by the O.P. within 45 days i/d Rs.50/- shall be levied for each day’s delay and the amount so accumulated will be deposited in the Consumer Legal Aid Account.
Let plain copy of this Order be supplied to the parties concerned by hand/by Post forthwith, free of cost for information & necessary action. The copy of the Final Order will also be available in the following Website:
confonet.nic.in.
Dictated and corrected by me.
