6 min readNew DelhiJul 29, 2026 03:17 PM IST
A Kerala consumer body has held Federal Bank guilty of deficiency in service after it allegedly blocked a customer’s international debit card without informing him, leaving him, his wife and young children unable to use lounge facilities at Kuwait airport despite having sufficient money in their account. The forum directed the bank to pay them Rs 1.25 lakh as compensation and costs.
President D B Binu, along with members V Ramachandran and Sreevidhia T N of the Ernakulam District Consumer Disputes Redressal Commission observed that the man, one Paul, and his family were left “helpless” and “anxious” in a foreign country, unable to access their own money despite maintaining adequate funds in the account.
“The opposite party (bank) admits by saying various lame reasons like Covid, staff shortage, travelling of complainant etc as reasons for not intimating the cancellation of the card. Moreover, above all, even the card was not sent by the opposite party to the complainant. These acts clearly constitute deficiency in service and unfair trade practice, and the complainant has proved the same from his side,” the July 14 order read.
The commission clarified that the bank could not escape liability merely because the international debit card had been issued “free of cost”, as it formed part of the “banking services” provided to an account holder.
Family trip to Kuwait, defunct card
The complainant claimed that he has been a customer of Federal Bank as a Non-Resident External (NRE) customer since 2015. He added that the bank issued a world debit card with validity till December 2023 carrying premium features like complimentary access to domestic and International lounges, etc, and he was using the card from 2018 and enjoying the premium benefits without any problems.
However, while travelling from Kuwait to Kochi with his family, while attempting to use the lounge facilities at the international airport in Kuwait using the said debit card, the payment was declined citing “card failure”. His family was allegedly refused entry to the lounge, and he added that since he was sufficiently loaded with funds, he did not carry any cash or alternative payment options with him. He added that this left him and his family in severe distress and mental agony.
He later found that the said debit card was deleted from the payment system without any notice or intimation. The complainant alleged that he also found that the bank had issued him a new card even before the expiry of the validity of the said debit card and even before the said deletion of the debit card from the payment system.
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He allegedly approached the bank later but besides being apologetic, the bank refused to take responsibility for the mental suffering and trauma that he and his family had to undergo.
‘Security alert led to blocking’
The bank said it blocked the card on August 10, 2021, after receiving a security alert from Mastercard that the card’s details may have been compromised. It said keeping the card active any longer could have exposed the customer to fraud and put both the customer and the bank at risk.
The bank added that it acted in good faith to protect the interest of the customer and to save him from malpractices/fraud using the credentials of his Mastercard. It was further submitted that though an SMS alert was initiated to the customer regarding the blocking of the card, but it was not delivered to him due to technical reasons.
It said that despite the best efforts from their side to contact Paul and inform him about the deletion and the issuance of a new card, it did not happen as he was abroad and travelling frequently.
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The bank stated that had the card not been blocked despite the alert from Mastercard, the loss that may have been suffered by the complainant would have been huge, and the bank should not be penalised for the care and caution taken to protect his interests.
‘Never requested new card’
The commission noted that Paul never requested the issuance of a new card, never consented to premature blocking of the existing card, which was still within its validity period, and was never informed by any reliable mode that his existing card was being deleted from the payment system and a new card had been issued and was lying at the branch.
The consumer body held that the bank cannot evade its liability on the ground that the card was issued free of cost and also cannot claim without any proof that its cancellation was intended to protect the complainant from any “hacking” of a huge amount of money.
The commission directed the bank and its branch to pay Rs 1 lakh to the complainant as compensation for the mental agony, hardships and trauma sustained, along with Rs 25,000 towards the cost of the proceedings.
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Significance of ruling
This ruling highlights that banks must inform customers before blocking or replacing debit cards, unless immediate action is absolutely unavoidable. Failure to do so can amount to a deficiency in service if it causes unnecessary hardship.
For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Kerala: 1800-425-1550) or call the National Consumer Helpline at 1915 for assistance.
