Consumer news: Holding that a bank cannot escape responsibility after failing to deduct a nominal insurance premium despite a sufficient balance in the customer’s account, the Uttarakhand State Consumer Disputes Redressal Commission has upheld an order directing the State Bank of India (SBI) to pay Rs 2 lakh insurance cover to the husband of a deceased woman enrolled under the Pradhan Mantri Suraksha Bima Yojana (PMSBY).
“There was a clear-cut deficiency in service on the part of the bank by not deducting the premium amount of Rs 12 from the account of the deceased on 27.05.2017, in spite of being a sufficient credit balance in her account,” the consumer commission said May 19, dismissing SBI’s appeal.
Govind Singh Rana’s wife, Kavita Devi, had enrolled under PMSBY through SBI on May 29, 2015, by paying an annual premium of Rs 12.
Insurance cover lapsed due to non-deduction
According to the case record, Govind Singh Rana’s wife, Kavita Devi, had enrolled under PMSBY through SBI on May 29, 2015, by paying an annual premium of Rs 12.
The scheme provided accidental insurance coverage of Rs 2 lakh. The premium for 2015-16 and 2016-17 was duly deducted from her SBI savings account.
However, for the year 2017-18, the premium was not debited by the bank even though adequate funds were available in the account.
The state consumer commission noted that the account statement showed a credit balance of Rs 3,367 as on April 1, 2017.
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The matter acquired significance after Kavita Devi suffered fatal injuries on February 17, 2018, while mowing grass in a forest area.
She was admitted to AIIMS Rishikesh the same day and later died during treatment on March 8, 2018.
Her husband subsequently sought payment of the insured amount under PMSBY, but the claim was denied on the ground that no premium had been received for the relevant year.
Uttarakhand State Consumer Commission · Kumkum Rani & B S Manral · SBI vs Govind Singh Rana · May 19, 2026
Rs 12
Annual premium not deducted
Rs 3,367
Balance in account on Apr 1, 2017
Rs 2 lakh
Insurance cover SBI must now pay
What happened — the timeline
May 2015
Kavita Devi enrolls in PMSBY through SBI; annual premium of Rs 12 to be auto-debited
2015–17
Premium duly deducted for two consecutive years — cover active
May 2017
SBI fails to deduct Rs 12 premium for 2017-18 despite Rs 3,367 balance — cover lapses
Feb–Mar 2018
Kavita Devi fatally injured; dies at AIIMS Rishikesh on March 8, 2018
Claim denied
SBI rejects Rs 2 lakh claim — grounds: no premium received for 2017-18
"There was a clear-cut deficiency in service on the part of the bank by not deducting the premium amount of Rs 12 from the account of the deceased, in spite of being a sufficient credit balance." — Uttarakhand State Consumer Commission, May 19, 2026
SBI's defences vs. why they failed
SBI's defences
What the bank argued
- No debit without account holder's consent
- Account had become dormant
- Fresh KYC required before any debit
- Physical branch visit needed
Why they failed
What the commission found
- Sufficient balance existed for Rs 12 deduction
- "Dormant" note — unsigned, unsealed, undated
- No evidence deceased was told about KYC
- Bank never denied receiving July 2018 application
Final order: SBI to pay Rs 2 lakh + 6% interest from March 12, 2019 until realisation + Rs 5,000 litigation costs · About PMSBY: Government accidental death insurance scheme; annual premium Rs 12; cover Rs 2 lakh; premium auto-debited from enrolled bank account each year.
SBI’s defence rejected
- Before the consumer commission, SBI argued that the deceased was not insured on the date of death because the premium for 2017-18 had not been deducted.
- The bank further contended that it could not debit the amount without the account holder’s consent.
- The consumer commission, however, found little merit in the argument. Referring to the account records, it was observed that there was enough balance in the account for the deduction of the Rs 12 premium.
- The commission also took note of a handwritten remark in the account statement claiming the account had become dormant and that fresh KYC and a physical branch visit were required before debits could be made.
- But the commission found the note unreliable because it carried neither signature nor seal nor any indication of when it was made.
- Importantly, the consumer commission said SBI failed to produce any material showing that the deceased had ever been informed about the alleged requirement of fresh KYC or a branch visit.
Consumer complaint allowed: Commission
The commission noted that the complainant had specifically pleaded that an application regarding the deduction of the premium had been submitted to the bank on July 11, 2018, but the SBI did not specifically deny this in its written statement.
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Observing that the district consumer commission had rightly appreciated the facts, the state consumer commission said there was no reason to interfere with the order granting relief to the complainant.
Dismissing the appeal, the consumer commission affirmed the direction requiring the SBI to pay Rs 2 lakh along with interest at 6 per cent per annum from March 12, 2019, till realisation, besides Rs 5,000 towards litigation costs.
Rs 20 fake electricity bill, Rs 1.99 lakh cyber fraud, apex consumer body orders SBI to pay up
On April 15, a Rs 20 electricity bill payment attempt by a State Bank of India customer turned into a Rs 1.99 lakh cyber fraud but the National Consumer Disputes Redressal Commission (NCDRC) has provided him relief ordering refund of Rs 1.99 lakh along with compensation of Rs 25000 banks holding that the banks cannot pass the buck when customers promptly report unauthorised electronic transactions, holding SBI liable to fully refund the amount.
A bench of Presiding Member AVM J Rajendra (Retd) and Member Justice Anoop Kumar Mendiratta was hearing a second appeal filed by the State Bank of India (SBI) challenging the Karnataka State Consumer Commission’s May 26, 2025 order directing refund of the amount along with compensation.
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“The Bank apparently cannot be absolved of the liability towards the losses suffered by the complainant on account of unauthorised electronic transactions…since the information of fraudulent transactions was shared with the Bank/OP within stipulated period,” the commission said.
The commission held that merely downloading a fraudulent application does not amount to negligence by the consumer. It said that no evidence was produced to show that OTPs were shared and the transactions were clearly unauthorised.
The bank failed to take adequate remedial action despite prompt reporting, said the commission.
“The complicity of the complainant cannot be presumed merely on account of downloading the application,” the national consumer commission observed, emphasising that the bank had failed to establish any negligence on the part of the customer in the fraudulent transactions.
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Top consumer body ordered SBI to refund Rs 13 lakh siphoned off from retired professor’s account
On May 15, the National Consumer Disputes Redressal Commission (NCDRC) has directed the State Bank of India (SBI) to refund Rs 12.93 lakh fraudulently siphoned off from the account of a retired Bengaluru professor in an alleged digital scam, ruling that the customer was entitled to “zero liability” protection under RBI guidelines.
A bench comprising Justice A P Sahi (president) and Bharatkumar Pandya (member) was hearing a second appeal filed by SBI against concurrent findings of the district consumer commission, Bengaluru, and the Karnataka State Consumer Disputes Redressal Commission, both of which had ruled in favour of one K P Sreenath, a retired professor of Botany at Bangalore University.
“In our opinion, therefore, the conclusions arrived at by the fora below (state and district consumer forums) are essentially on the basis of the facts as established on record and the fora below are absolutely right in their conclusion that the entire liability for the loss lies with the bank in view of para 6(ii) of the RBI circular,” the national consumer commission said, dismissing SBI’s appeal.
Fraudulent withdrawals from retirement corpus
According to the complaint, Professor Sreenath retired in November 2017 and received retirement benefits amounting to nearly Rs 25 lakh, which were credited to his SBI savings account maintained at the Nagarabhavi branch in Bengaluru.
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On March 11, 2019, he approached the bank seeking a transfer of the amount to another bank account through Real-Time Gross Settlement (RTGS) and paid the required charges. However, the transfer was allegedly never executed, and the bank also failed to inform him about the unsuccessful transaction.
The complainant later discovered during a visit to the branch on April 30, 2019, that Rs 12,93,922 had been fraudulently withdrawn from his account through multiple unauthorised transactions carried out between April 12 and April 30, 2019. Following the discovery, he lodged complaints with the bank authorities, local police, Cyber Crime Police Station and the banking ombudsman.
He alleged that the fraud occurred because of weak banking software, inadequate firewall protection and the SBI’s failure to maintain proper security systems to safeguard customer accounts.
Claiming a deficiency in service on the part of the SBI, the retired professor approached the district consumer commission in July 2021 seeking a refund of the fraudulent amount along with interest and compensation for mental agony.
Govind Singh Rana’s wife, Kavita Devi, had enrolled under PMSBY through SBI on May 29, 2015, by paying an annual premium of Rs 12.