4 Lakh Insurance Claim Denial By Bank Despite Admitting Error In Account Maintenance.

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?Respected Team, ?I am writing to seek legal guidance regarding a significant deficiency in service by Central Bank of India. ?Case Summary: ?My late mother held a savings account at the gurgaon branch. She was enrolled in the PMSBY and PMJJBY insurance schemes (Total coverage ?4 Lakhs). ?The bank erroneously deducted several service charges over time, which depleted the account balance. Consequently, the insurance premiums were not debited, and the policies lapsed. ?My mother passed away on 13/07/2021. When we approached the bank for the claim, they initially denied any error. ?However, after persistent follow-ups, the bank recently admitted their mistake and refunded ?3,169 (the wrongly deducted charges) into the account. ?While they admitted the error by refunding the amount, they are now refusing to pay the ?4 Lakh insurance claim that was lost solely due to their negligence. ?During the refund process, the bank took advantage of our financial distress and made my father and me sign a "settlement/consent letter" without explaining that it might waive our right to the insurance claim. ?Legal Information Sought: ?Since the bank has admitted their fault by refunding the charges, can we legally hold them liable for the consequential loss of the ?4 Lakh insurance claim in Consumer Court? ?How can we challenge the "settlement letter" which was signed under pressure and without full disclosure of facts? ?We are filing an RTI tomorrow for the RD ledger and internal notes. What other documents should we gather to make our case airtight? ?I am a CSC VLE and have already raised the issue on X (Twitter). Looking forward to your expert advice. ?Regards, Mantu Kumar (M.K. Insurance & Financial Services) Mobile: 8802188082

Dear Sir With my family experience, I would say that banks do send SMS atleast one month before deducting the premium for PMSBY and PMJJBY. The SMS cautions us to keep sufficient balance and it is our responsibility to maintain the same. Banks generally recover some charges if the account becomes inoperative. They also send an SMS if there are no operations in account for a continuous period of more than one year. Now coming to your claims about PMSBY and PMJJBY, I trust, you, being an insurance advisor, are aware of the terms and conditions of both these schemes. I would like to narrate the same for your ready reference. PMSBY – Pradhan Mantri Suraksha Bima Yojana is an accident insurance cover, maximum upto Rs.2 lakhs, for permanent disability or death due to any accident. So, the cover will not be available if the death of your mother was not due to accident. PMJJBY – Pradhan Mantri Jeevan Jyoti Bima Yojana is a term life insurance plan. It offers cover due to death by any cause. It has to be renewed every year upto the age of 55 years. The policy gets terminated if the bank account is closed or it does not have sufficient balance to auto debit or if the policy holder turns 55 years of age. Please check whether your claim fits into these terms and conditions. If still you have any issues, you may escalate your grievance as explained in the following link - https://financialservices.gov.in/beta/en/grievances-overview

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