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 after facing a distressing situation with his education loan from X Bank. In DD/MM/YYYY, he had obtained an education loan to pursue higher studies. However, due to internal processing errors at X Bank, a duplicate loan account was created without his knowledge or consent. This created multiple complications including incorrect interest calculations, dual EMI demands, and credit score damage.

When Mr.X discovered this error after several months of irregular notices, he immediately contacted X Bank to rectify the situation. The bank acknowledged the mistake but failed to take corrective action promptly. Frustrated with the bank’s inaction, Mr.X filed a complaint with RBI’s Banking Ombudsman. However, after several months, RBI closed his complaint stating that insufficient documentary evidence was provided, despite Mr.X claiming he had submitted all required documents including loan agreements, correspondence with the bank, and transaction records.

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.

• Maintain detailed records of all communications with the bank and regulatory authorities
• Submit complaints through multiple channels including written applications with acknowledgment receipts
• Consider approaching Consumer Forum if banking ombudsman route is exhausted

Applicable Sections of Law

Under the Bharatiya Nyaya Sanhita (BNS), Section 318 deals with cheating and dishonest practices by institutions. Section 351 addresses criminal breach of trust when banks mishandle customer funds or accounts. The Bharatiya Nagarik Suraksha Sanhita (BNSS) Section 173 governs complaint procedures and evidence submission requirements. Additionally, RBI Guidelines on Customer Service and Banking Ombudsman Scheme provide regulatory framework for addressing such banking disputes and ensure proper documentation standards are maintained.

If You Are the Complainant

• File a fresh complaint with Banking Ombudsman with complete documentary evidence including certified copies
• Simultaneously approach the Consumer Disputes Redressal Forum under Consumer Protection Act
• Send a legal notice to the bank demanding rectification and compensation for losses incurred
• Document all financial losses including credit score impact and additional interest charges
• Consider RTI application to obtain internal bank records regarding the duplicate account creation

If You Are the Victim

• Immediately obtain your credit report and document any negative impact on credit score
• Collect all original loan documents and compare them with bank records to identify discrepancies
• Gather evidence of duplicate EMI deductions or incorrect interest calculations from bank statements
• Document any harassment or inappropriate recovery actions taken by the bank
• Seek immediate legal intervention to prevent further damage to your financial standing

How the Police Behave in Such Cases

Police typically treat banking disputes as civil matters initially and may be reluctant to register FIR unless clear criminal intent is established. However, if fraud or criminal breach of trust is evident, they are obligated to investigate. They usually advise approaching Banking Ombudsman first before considering criminal action. Documentation becomes crucial for police to understand the technical banking aspects of the case.

FAQs People Normally Have

Can I file both civil and criminal cases simultaneously? Yes, you can pursue both civil remedies through Consumer Forum and criminal action if fraud is involved.

How long does Banking Ombudsman take to resolve complaints? Typically 3-6 months, but complex cases may take longer.

What if RBI closes my complaint again? You can file an appeal with the Appellate Authority or approach Consumer Forum as an alternative remedy.

Can I claim compensation for credit score damage? Yes, you can claim damages for financial losses including credit score impact and mental harassment.

What Evidence Is Required?

• Original loan agreement and all amendments signed with the bank
• Bank statements showing duplicate account entries or incorrect deductions
• All written correspondence with bank officials including emails and letters
• Credit reports showing impact on credit score due to bank’s error
• Screenshots or copies of online banking showing duplicate accounts
• Acknowledgment receipts of all complaints filed with bank and RBI
• Independent audit report if available showing discrepancies in loan processing

How Long Will the Investigation Take?

Banking Ombudsman cases typically take 3-6 months for resolution. Consumer Forum proceedings may extend 6-12 months depending on complexity. Police investigation, if criminal case is filed, usually takes 6-18 months. Court proceedings can extend 1-3 years depending on the forum chosen and case complexity.

Advocate Sudhir Rao, Supreme Court of India