One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Mr. X approached me regarding property registration with XYZ Development Authority. To proceed, he needed to clear his father Mr. Y’s previous Kisan Credit Card loan. On DD/MM/YYYY, they visited X Bank in City A and inquired about the outstanding loan amount. The bank officials stated the total due was ₹1,24,000. Mr. X immediately deposited the entire amount and requested the No Due Certificate required for land registration. However, the bank manager demanded additional unofficial payment to issue the certificate, despite the loan being fully cleared. This created a situation where legitimate borrowers were being harassed for bribes to obtain rightful documents after loan settlement.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

• Document all interactions with bank officials including receipts and written communications
• Record conversations if legally permissible in your state
• File complaint with banking ombudsman immediately
• Approach higher banking authorities or regulatory bodies

Applicable Sections of Law

Under Bharatiya Nyaya Sanhita (BNS), such cases involve corruption and extortion. Section 61 BNS deals with criminal breach of trust, while Section 308 covers extortion. Section 169 addresses public servant unlawfully engaging in trade. Under Bharatiya Nagarik Suraksha Sanhita (BNSS), Section 173 provides procedures for investigation of corruption cases. Banking Regulation Act provisions also apply for regulatory violations. Consumer Protection Act offers additional remedies for service deficiency and unfair trade practices by banking institutions.

If You Are the Complainant

• File written complaint with bank’s grievance redressal officer within 30 days
• Escalate to Banking Ombudsman if no response within 30 days
• Lodge police complaint under anti-corruption laws
• Approach Consumer Court for service deficiency claim
• File RTI application to obtain bank’s internal guidelines on certificate issuance

If You Are the Victim

• Immediately contact bank’s customer care and register formal complaint
• Obtain loan closure receipt and maintain all payment documentation
• Request written communication for any additional requirements
• Contact Reserve Bank of India’s complaint portal online
• Consider approaching media if other channels prove ineffective

How the Police Behave in Such Cases

Police typically treat banking corruption cases seriously, especially when backed by documentary evidence. They may require you to provide detailed statements and supporting documents. Initial investigation focuses on establishing the demand for illegal gratification. Police often coordinate with banking regulators and may conduct raids if sufficient evidence exists. However, they might initially suggest resolving through banking channels before formal FIR registration.

FAQs People Normally Have

• Can banks legally demand extra money for no due certificates? No, banks cannot demand additional payments beyond the actual loan amount and legitimate charges.
• How long should banks take to issue no due certificates? Typically 7-15 working days after complete loan closure.
• What if the bank manager threatens to delay the process? Document the threat and report to higher authorities immediately.
• Can I get compensation for harassment? Yes, through consumer courts for service deficiency and mental agony.

What Evidence Is Required?

• Original loan agreement and all repayment receipts
• Bank statements showing loan closure transactions
• Written communications with bank officials
• Audio/video recordings of corrupt demands (if legally permissible)
• Witness statements from people present during interactions
• Email trails and SMS communications
• Bank’s internal guidelines on certificate issuance procedures

How Long Will the Investigation Take?

Banking ombudsman typically resolves complaints within 30-45 days. Police investigation may take 2-6 months depending on complexity and evidence quality. Consumer court proceedings usually conclude within 6-12 months. RBI investigations can take 3-6 months for administrative action against the bank. Overall resolution timeframe varies based on the forum chosen and cooperation from banking authorities.

Advocate Sudhir Rao, Supreme Court of India