UCO Bank to pay Rs 25,000 for raising illegal demand

New Delhi, Sep 18: UCO Bank has been directed by a consumer forum here to pay Rs 25,000 to one of its customers for "illegally" demanding Rs 14,442 from him on the ground of increase in rate of interest, after he had paid all his loan installments.

The New Delhi District Consumer Disputes Redressal Forum awarded the compensation saying the loan agreement did not provide for increase in rate of interest and that UCO Bank had not produced any evidence to show the enhancement in interest.

"The reading of the clause providing for interest in the (loan) agreement does not provide for any enhancement or any notifications of changed rates. In this case, opposite party (UCO Bank) has failed to produce any evidence of increase of its rate of interest, i.e., since when and for how long... In our view, bank has acted totally illegally in demanding Rs 14,442.

"Opposite party is directed to issue no objection certificate, withdraw charges of Rs 14,442 and also pay Rs 25,000 as compensation for harassment and litigation expenses to complainant (loanee)," said the bench presided by C K Chaturvedi.

The forum's order came on the complaint of Rohini resident Ramnessh Garg, who had said the bank had demanded the amount after he had fully paid all installments.

The bank while admitting that he had paid all the loan installments, had contended in its defence that the amount was demanded from him, as per the clauses of the loan agreement.

PTI