Standard Chartered Bank fined for levying “minimum balance” charges

Standard Chartered Bank has been told to pay two of its customers in India Rs 34,293.24 for levying ‘minimum balance’ charges on them without sufficient intimation.

The bank had charged Rs.750, Rs.830 and Rs.830 to the accounts of Surinder Pal Arora and Nirmal Arora of Kirti Nagar, New Delhi, for failing to maintain Rs 10,000 as minimum balance in their savings account. The duo then approached the consumer courts claiming that the bank should not have done so as theirs were zero-balance accounts.

The bank responded by saying that it had converted all zero-balance accounts to 10,000-rupee balance accounts in 2002. The National Consumer Disputes Redressal Commission, however, did not accept the argument.


“Case of the respondent (Standard Chartered Bank) is that in April 2002, the respondent bank introduced the scheme which require the saving bank account holder to maintain minimum balance of Rs.10,000/-failing which the service charges were to be levied. Respondent has claimed that a general letter in this regard was sent to all the customers. The respondent, however, has failed to lead any evidence to prove that the change in the rules was intimated to the petitioners. Therefore, the respondent bank by levying service charges has committed an act amounting to deficiency in service,” it held in a ruling.

The National Consumer forum, comprising Justice Ajit Bharihoke and Rekha Gupta, also set aside a ruling by the State forum which had reduced an earlier compensation award by a lower forum to just Rs 3,000, pointing out that the complainants have been running after this case for close to a decade.

“The consumer complaints were filed in the year 2005. Thus, it is clear that because of the wrong act of the opposite party, the petitioners have been forced to undergo the rigours of a protracted litigation for 9 years before the District Forum, State Commission as also the National Commission. Obviously, the petitioners must have attended the proceedings before all the three foras and their visit to the foras must have entailed expenses.

“Even if the travelling expenses for attending the dates of hearings are taken into account, then also in all likelihood, the petitioners must have spent more than Rs.3000/- for attending the proceedings. Besides the expenses incurred, the petitioners have also suffered unnecessary harassment and mental agony due to protracted litigation, for which also they should be compensated.

“Taking the aforesaid aspects into account, we find that the compensation and litigation expenses awarded by the District Forum is more than reasonable. The State Commission in exercise of its appellate powers had no jurisdiction to arbitrarily reduce the compensation and litigation expenses to Rs.3000/- without assigning any justified reasons for the same. That being the case, the order of the State Commission reducing the amount of compensation and litigation expenses cannot be sustained.”