Money & Banking

Banks cannot deny copies of account statements to customers, says DRT

G Balachandar Chennai | Updated on September 18, 2020 Published on September 18, 2020

Banks can charge for account statements but cannot deny them to customers, says DRT   -  Getty Images/iStockphoto

In another ruling, the DRT says that the authorised officer has no authority to extend payment deadline in auction deals

The Debt Recovery Tribunal (DRT) in Chennai has pronounced two major orders. One, banks cannot deny copies of account statements to their customers. Two, in an auction deal, the authorised officer has no power to extend timeline for payments by the purchaser.

DRT’s Presiding Officer NV Badarinath pronounced in its order dated September 14 stating that the banks cannot deny furnishing copies of accounts statements to their customers. The order was pronounced on a plea filed by MSME borrowers for furnishing statements from a SME Branch of State Bank of India in Chennai.

The order highlighted that every bank customer is entitled to have copies of his/her statement of account(s) from his banker and the bank is under contractual obligation to furnish them to its customers.

Banks can charge for statements

Banks may charge for the copies, but cannot deny customers the right to have a copy of the statement of account by virtue of the contract of lending entered between the bank and the customer.

This right cannot be denied to the borrower, even in cases where the borrower has discharged the debt or defaulted in discharging the debt due to the bank, it pointed out.

“Needless to say that transparency and accuracy in maintaining the accounts of its customers is the fundamental duty of any bank. Breach of this ‘duty’ would result in breach of ‘trust’ reposed in the bank. Insofar as the present case is concerned, the direction supra, to the respondent bank is nothing but an opportunity to establish that the bank had not breached this important ‘duty’ and that it always maintains transparency and accuracy in the accounts of its customers,” the order said.

Auction deals

The DRT through another order also clarified whether the authorised officer has the power to extend the time to deposit balance 75 per cent of sale price by the auction purchaser.

The DRT order said neither the SARFAESI Act nor the rules made there under empower the authorised officer to extend the time for deposit or the purchaser to enter into an agreement with the authorised officer for extension of time for deposit of the full or part of the 75 per cent sale price.

On the contrary, the law and rules mandate that the extension of time for payment of 75 per cent of the balance sale consideration shall be by entering into a written agreement between the secured creditor and the purchaser, it stated.

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Published on September 18, 2020
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