Bank told to pay retired scientist over Rs 15.35 lakh for failing to notify FD maturity

The order was passed on October 7 by commission president M Ramgopal Reddy and members D Sreedevi and J Shyamala. Besides returning the deposit with interest, the commission directed the bank to pay Rs 25,000 for mental agony and inconvenience and Rs 10,000 towards litigation costs. A retirement saving meant for old age The complainant, a retired scientist, invested Rs 15 lakh from his retirement benefits in a Fixed Deposit Receipt at bank branch on December 13, 2018.

The deposit was made under the senior citizen savings scheme at an interest rate of 8.5 per cent per annum and was due to mature on December 12, 2023. He told the commission that he had placed the money in the fixed deposit specifically to meet contingencies in his old age. According to his complaint, bank neither informed him about the maturity nor credited the maturity proceeds to his savings bank account.

He said he assumed the deposit had been renewed automatically. 35L Portal showed 0% interest The problem came to light when the man checked the bank's online portal. Instead of showing that the deposit had matured, the portal displayed a fresh maturity date of December 12, 2028, with the interest rate shown as zero per cent. When he approached the bank, he was reportedly told that the scheme belonged to the Government of India and that no interest could be paid after maturity, even though his money had not been returned.

The bank also told him that he could have extended the deposit by applying within one year of maturity. The Indian Express news report added that the man argued that the bank never told him at the time of investment that it was a government scheme, nor did it communicate the maturity date through SMS, email, or any other means. He alleged deficiency in service and unfair trade practice. Bank's defence Bank said that when the deposit matured on December 12, 2023, it was retained in the account because the customer had not given instructions for renewal or withdrawal.

The bank said this was consistent with the scheme’s guidelines. The Indian Express report further stated that the bank denied being legally obliged under the senior citizen savings scheme rules to mandatorily inform depositors about maturity via SMS, email, or other means. It added, however, that it generally sends reminders where a customer’s contact details are updated. On the portal’s display of a December 2028 maturity date and zero per cent interest, the bank described it as a technical glitch that did not change the actual status of the account.

33 lakh relief after cancelled Toronto flight Commission finds service deficiency The commission did not accept the bank’s explanation. It held that the bank was deficient in service both because it did not intimate the depositor about maturity and because it did not inform him about the option to extend the deposit for another three-year term. “There is deficiency in service on the part of the opposite party for not intimating the complainant regarding the maturity of the fixed deposit and also for not informing the extension of the FD for another term of 3 years,” the commission said.

The commission noted that although the customer had not applied to extend the deposit within the prescribed period, the bank had retained the money after maturity without establishing a proper basis for showing zero interest on its portal. What the bank must payAmount / RatePrincipal fixed deposit amountRs 15 lakhInterest up to contractual maturity in December 20238.5% per annumInterest from maturity until actual paymentApplicable savings deposit rateCompensation for inconvenience and mental agonyRs 25,000Litigation costsRs 10,000Total payout (excluding post-maturity interest)Over Rs 15.35 lakh The ruling makes clear that banks cannot simply hold a customer’s matured deposit without explaining its status or ensuring the depositor knows the available options.

Where a bank retains funds after maturity and its systems create confusion—such as showing zero interest—the consumer commission may treat this as poor service. For consumers facing similar issues, the commission’s order is a reminder to keep records of deposit receipts, maturity dates, and communications with the bank. Aggrieved customers can approach their state consumer commission or call the National Consumer Helpline at 1915; in Telangana, the consumer helpline number is 0771-2582902.