Chennai court slaps ₹20 lakh fine after bank overcharges man on loan closure

Chennai: A private bank has been fined Rs 20 lakh by the Chief Metropolitan Magistrate Court in Egmore for allegedly overcharging a man by Rs 14.3 lakh when he pre-closed a loan of Rs 1.5 crore.

Police reports state that R Selvaraj, an entrepreneur, had taken the loan in 2006 by pledging his house with Kotak Mahindra Bank. He closed the loan early in 2007 by paying Rs 1.7 crore via demand draft.

Later, Selvaraj’s auditor discovered that he had overpaid by Rs 14.3 lakh. Although the bank initially assured assistance when approached, the excess amount was never refunded, TNIE reported.

Selvaraj also approached the RBI ombudsman for help but was informed that the deadline for filing a complaint had already passed.

In 2018, he filed a complaint with the North Beach police, which was later handed over to the bank fraud division of the Central Crime Branch (CCB).

Following an investigation, police filed a charge sheet against the bank and six of its employees. According to the police, the court imposed a fine on the bank but discharged the six employees from the case. Of the total fine, half will be awarded to Selvaraj, while the remaining half will go to the court.