Is your bank loan insured?
When Mr. S. Kumar took a loan of Rs. 10 Lakhs for his business in 2018, the bank, in Namakkal district of Tamil Nadu, deducted a premium of Rs. 35,535 from his account as the premium for a fire insurance policy.
Good enough.
But Mr. Kumar never received the policy, and when he contacted the bank, he was told to approach the insurance company as the bank had already paid the premium amount to the insurance company.
Despite never having received the policy document or a refund of the premium amount, Mr. Kumar successfully repaid the loan amount as per his loan agreement.
Then in June 2021, he sent a legal notice to the bank, following when he received a refund of the premium amount. Unsatisfied, he then filed a complaint with the Consumer Disputes Redressal Commission (CDRC), Namakkal.
On 10th October 2023, the CDRC ordered the bank to pay Rs. 2 Lakhs to Mr. Kumar and an additional Rs. 20,000 to compensate him for the cost of litigation.
The bank now has 4 weeks to comply with the CDRC’s order.
Is your bank loan insured? Make sure it is and that you have proof of such insurance a.k.a. the policy document.
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