Bank of Baroda to pay Rs 1.11 lakh unpaid PM housing scheme subsidy to homebuyer

According to the information obtained by the complainant’s counsel under the Right to Information (RTI) Act, an amount of Rs 1.44 lakh was credited to the bank from HUDCO under the Pradhan Mantri Awas Yojana (PMAY) in January 2021. Once the bank received the amount, they were obliged to transfer the benefit to the complainant immediately, but it failed to do so.

The commission observed that the bank credited only Rs 33,260 to the complainant on July 29, 2021. It further noted that the bank later returned Rs 1.11 lakh to HUDCO without justification.

Man denied PMAY subsidy

The complainant had availed a Rs 13.50 lakh home loan from Bank of Baroda in September 2017 to purchase a flat under the PMAY scheme. He alleged that the bank assured him that the HUDCO subsidy would be provided within four to five months.

After repeated enquiries, the bank informed him in January 2019 that it had applied for the PMAY subsidy. However, in March 2021, the bank told him that the subsidy was subject to keeping the loan alive for the entire period. By then, the complainant had repaid the loan in 46 months and was credited only Rs 33,260, whereas he claimed that he had been assured a subsidy of Rs 1.46 lakh.

The man approached the consumer commission, seeking the remaining subsidy of Rs 1.13 lakh, along with interest, Rs 5 lakh compensation for mental harassment, and Rs 55,000 towards litigation expenses.

Subsidy linked to loan: Bank

The bank argued that the man was entitled to a 4 per cent interest subsidy subject to the applicable loan tenure. Since he repaid the entire loan within 46 months, only Rs 33,260 was payable to him.

Had he kept the loan account active for 120 months, he would have received Rs 1.46 lakh. The bank also contended that it was only an agency forwarding the subsidy claim, while the PMAY authorities were responsible for processing and releasing the subsidy.

The National Housing Bank contended that the complainant was not its consumer and that the allegations concerned the Bank of Baroda. It said no complaint or representation seeking subsidy had been received by it and denied any deficiency in service on its part.

Bank assured subsidy within months: Order

The commission noted that the bank sanctioned the loan of Rs 13.50 lakh in the complainant’s favour in September 2017 and he was assured that the PMAY subsidy benefit would be given within four to five months.

It also observed that the complainant had made repeated enquiries through emails regarding the status of the subsidy. Ultimately, the commission held that the complainant was entitled to the remaining Rs 1.11 subsidy, along with reasonable compensation for mental agony and harassment and litigation costs.

Takeaway

The judgement underscores that banks handling government-linked housing subsidies must properly pass on amounts received for eligible consumers. It also highlights that returning subsidy amounts without justification can constitute deficiency in service, attracting liability for the remaining subsidy, compensation and litigation costs

Consumers facing similar grievances may contact the consumer helpline in their respective states (Punjab helpline: 1800-425-1082) or dial the National Consumer Helpline at 1915 for assistance.

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