This refers to, “Financial Regulation—No Uniformity” (Moneylife, 9 February 2012). The role of...
The District Consumer Disputes Redressal Forum gave the order on the plea by Janakpuri resident, Bhoodev Singh, who said the shares he had pledged with the bank for opening a security current account were sold without his approval.
ICICI Bank has been ordered by a consumer forum in New Delhi to pay over Rs2.14 lakh to one of its account holders for causing him financial loss by selling his shares pledged with it at lower price without his consent.
The District Consumer Disputes Redressal Forum gave the order on the plea by Janakpuri resident, Bhoodev Singh, who said the shares he had pledged with the Bank for opening a security current account were sold without his approval.
Mr Singh said the shares were sold by the ICICI Bank for a sum of Rs3,64,288 while they were worth Rs5,63,724 and caused him a financial loss of over Rs1.99 lakh.
“The act of selling of shares by the bank, particularly in the given circumstances, cannot be held to be as per law and according to the principle of natural justice.
“The act of the Bank has caused not only financial losses as claimed by the complainant but the complainant suffered harassment, pain and mental agony,” the forum said.
In its reply, the ICICI Bank had said that Mr Singh was told that the bank would be at liberty to sell the pledged shares if his account remained overdrawn. As his account was overdrawn since September 2008, his shares were sold.
The bench, presided over by BB Chaudhary, said it was the duty of the bank to serve a notice on Mr Singh demanding payment of overdue amount and if he did not pay the same, then the bank could have sold the shares.
“Pay to the complainant (Mr Singh) a sum of Rs1,99,436, a sum of Rs10,000 as compensation for harassment and a sum of Rs5,000 as litigation charges,” it said while holding that he had suffered a loss of over Rs1.99 lakh as his shares were sold for a lesser value and without his consent.
In the late afternoon, ICICI Bank was trading at around Rs875 per share on the Bombay Stock Exchange, 3.95% down from the previous close.
The decision to hike interest rates in December 2011 was in line with the recommendations of the Shyamala Gopinath Committee, which had suggested linking of interest rates on small savings with that of the market.
The government is likely to hike the interest rates on deposit schemes offered by post offices, like savings account, Monthly Income Scheme (MIS), Public Provident Fund (PPF), etc by about 0.25% from 1 April 2012.
A circular on revised interest rate on small savings schemes will be issued by 28 March 2012, official sources said, adding that there could be a 0.25 basis points hike in the rates.
“We are in the process of calculating the rates. The new rates will be applicable from 1 April 2012,” they added.
The government had in December 2011 hiked interest rates on post office savings accounts (POSA) to 4%, from 3.5%. Similarly, the interest rates on MIS and PPF was fixed at 8.2% and 8.6% respectively.
The decision to hike interest rates in December was in line with the recommendations of the Shyamala Gopinath Committee which had suggested linking of interest rates on small savings with that of the market. The panel had also suggested that the interest rates on small savings schemes should be revised annually.
The revision in the interest rates is aimed at maintaining the attractiveness of the small savings schemes vis-a-vis fixed deposit schemes operated by banks.
The government, as part of economic liberalisation process, had freed the interest rates on banks deposits giving freedom to lenders to fix rates depending upon the asset-liability position, but continued to fix rates for small savings schemes.
Pursuant to the recommendations of the Gopinath Committee, the government had introduced the National Savings Scheme (NSC) with a 10-year maturity to attract long-term funds.
The annual investment ceiling in PPF savings was increased to Rs1 lakh from Rs70,000.