Nagpur consumer panel orders SBI to pay Rs 5 lakh to widow despite 6-year delayed claim

SBI cannot hide behind 90-day rule, rules Nagpur consumer court. File Pic

A consumer commission in Nagpur has directed the State Bank of India (SBI) to pay Rs 5 lakh to a widow whose insurance claim was rejected due to a six-year delay in filing. The District Consumer Disputes Redressal Commission (Additional DCF) held that "mental shock" following the sudden death of a spouse is natural and that grieving families may take time to recover before pursuing financial claims, reported PTI.

In its order delivered last month, the commission ruled that a bank cannot use the 90-day claim submission deadline as a shield when it has failed to properly inform customers about the insurance benefits attached to their debit cards.

Widow approached bank years after husband's death

According to the complaint, the woman's husband held an SBI account at the Tri Junction Cantonment branch in Nagpur and had a debit card that carried accidental insurance benefits of up to Rs 5 lakh as per the news agency.

The complainant said neither she nor her husband had been informed by the bank about the insurance protection linked to the debit card. Her husband died in a road accident in September 2013, leaving her in severe emotional distress.

After later learning about the insurance scheme, she approached the bank in March 2019 and submitted all required documents to claim the benefit. However, the bank allegedly kept the matter pending and failed to make a decision, forcing her to approach the consumer commission.

SBI argued claim was delayed and card was not covered

In its defence, SBI argued that the complaint was "false and baseless" and maintained that it does not individually inform debit cardholders about insurance benefits. The bank further contended that the deceased held a ‘MasterCard Classic' debit card, which allegedly did not qualify for insurance coverage, as per PTI.

SBI also cited the complainant's failure to file the insurance claim within the mandatory 90-day period following the death.

Commission finds ‘deficiency in service'

The commission rejected SBI's arguments, noting that the bank failed to provide any clear documentary proof showing that the ‘MasterCard Classic' category was excluded from insurance coverage.

It observed that insurance benefits were extended to other debit cardholders without additional charges, and offering different treatment to customers under similar circumstances amounted to "deficiency in service", reported the news agency.

The commission also noted that there was no evidence showing the bank had adequately informed the deceased or his family about the insurance facility.

Compensation and interest awarded

Holding SBI's conduct to be "unjust", the commission ordered the bank to pay the widow the Rs 5 lakh insurance amount along with six per cent annual interest from September 5, 2019, the date on which the complaint was filed.

Additionally, the bank was directed to pay Rs 10,000 towards mental agony and litigation costs.

(With PTI Inputs)