Banking Ombudsman can help you figure out the problem

Now days taking loans is considered as a normal process. Working professionals, particularly the youth earning good packages, easily get fascinated by the aggressive campaigns of various banks and end up investing in to multiple credit cards and or obtaining personal loans.

But there is a need for customer awareness and education regarding the norms of the banking system and even the agents need to be trained for handling debt recovery.

There had been an incidence where a manager of a nationalized bank was attracted by an offer of a foreign bank for free issue of credit card for a year, with added features like accident insurance cover, etc. He got a credit card in December 2004 and used it up to November 2005. He paid his bills regularly and during the first week of December 2005, before expiry of the one-year term, he wrote to the issuing bank saying he was no more interested in the card.

As a security measure he cut the card into four pieces and requested for deletion of his membership from the bank’s card family. He also put a request with the bank to block the card to avoid misuse.

He did not get any acknowledgement from the bank. After following all the rules in January 2006, he received a bill containing an entry of Rs 600 towards carried over bill penalty and late fee and another entry of Rs 2,000 towards card renewal charges. In reply he wrote to the bank saying he had paid all bills and owed them nothing. Again, the bank did not send any acknowledgement in regard to his application.

In March, he again received another bill. The same story followed - he wrote to the bank, but there was no response.

After six months, when the bill amounted to around Rs 6,000, the customer tried contacting the bank through other means. Contacting through the helpline seemed nearly impossible, but he did manage to get through to the credit card department of the bank and narrated his story to an official. He was assured that the matter would be looked into.

The assurance given by the bank did not turn up fruitful, after 3-4 months, a recovery agent from the bank called at his residence and informed his wife that the card holder owed Rs 9,000 and the amount had to be paid immediately. Even the bank agents started calling up, which were often abusive. They refused to accept that he owed the bank nothing.

By October 2007, the bill amount had increased to around Rs 17,000. Finally, he decided to write to the nodal officer of the foreign bank, apprising him of the details and the harassment meted out to him. He marked a copy of the letter to the chief general manager, Reserve Bank of India and the Banking Ombudsman.

This time, the bank acted quickly and sent him, for the first time, a detailed letter. The letter had all the details of the charges standing against him. It was stated that in October 2005, Rs 600 was spent by the cardholder using the card, but the amount was paid one