Unreasonable Deductions Under The Name Of 'Consolidated Charges', New Delhi District Commission Holds Axis Bank Liable For Unfair Trade Practices

Brief Facts:

Mr. Raj Kumar (“Complainant”) maintained a Salary Account with Axis Bank Ltd. (“Bank”) under the scheme "Axis Republic Salary Account”. On December 15, 2018, the bank deducted an amount of Rs. 2405.61/- from the Complainant's account under the label of "Consolidated Charges”. Subsequently, from January 2019 onwards, monthly deductions were made under the same category. Despite numerous inquiries by the Complainant seeking clarification on the reasons behind these deductions, the bank failed to provide a satisfactory reply. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-VI (“District Commission”) and filed a consumer complaint against the bank.

The Complainant alleged that the bank, over 26 months, deducted an approximate amount of Rs. 40,000/- from the salary account, claiming the deductions were made under the ambiguous term "Consolidated Charges."

On the contrary, the bank contended that the Complainant opened a Savings Bank account with the bank, and all terms and conditions were explained during the account opening. The Complainant acknowledged these terms by signing the declaration in the account opening form. It asserted that if the salary was not credited for three consecutive months, the account automatically converted into a normal savings account without notice, and applicable charges were then levied. The bank argued that the Complainant received a "Welcome Kit" containing details of the schedule of charges, terms and conditions, and other relevant documents. It maintained that the Complainant, having received the "Welcome Kit," cannot deny awareness of the schedule of charges and terms.

Observations by the District Commission:

While acknowledging the bank's right to charge amounts, the District Commission emphasized that for other services, the bank must adhere to guidelines issued by the RBI. It held the deductions made under the guise of "Consolidation Charges" by the bank lacked specificity regarding the reason and purpose. It held that the Axis Republic Salary Account under consideration involved no minimum deposit, zero balance, and no maintenance charges.

The District Commission questioned the bank's contention that the "Welcome Kit" is a general mass kit and held that the bank failed to provide the particular variant (Republic Salary Account) Kit along with its terms and conditions to the Complainant. Therefore, it held that the bank arbitrarily deducted charges from the Complainant's bank account and was held liable for unfair trade practices.

Consequently, the District Commission directed the bank to refund the full amount deducted under "Consolidation Charges" from the Complainant's Axis Republic Salary Account from December 15, 2018, to the date of the order receipt, with an 8% per annum interest within four weeks. Additionally, the bank was prohibited from engaging in any unfair trade practices with the Complainant. It was also directed to pay a compensation of Rs. 25,000/-, along with assessed litigation expenses of Rs. 10,000/- to the Complainant.