1. This appeal arises out of an order passed by the SCDRC, Chattisgarh dated 04.09.2025, whereby the State Commission has arrived at the conclusion that the complainant was erroneously denied the benefits of the payment of interest on the TDR deposits made by him on the ground that the said deposits were subject to the auto renewal norms prescribed under the RBI circular and accordingly the dues of interest was directed to be paid.
2. The facts of the case are that there are three TDRs of the complainant with the respondent bank, one for Rs.5,80,3000 acquired on 26.07.2018 for one year, the second for an amount of Rs.3,96,40,000/- acquired on 06.08.2018 for one year, and the third was for sum of Rs.85,15,000/- dated 05.10.2019 for six months. The interest payable on all the three deposits was same @ 6.85%.
3. On maturity, the deposits were not redeemed and according to the complainant they would stand automatically renewed. The State Commission has come to the conclusion that the said contention of the complainant is correct, whereas the appellant bank has come up contending that the said conclusion is contrary to the circulars of the RBI that were relied on to contend that in the absence of any instructions for auto renewal, the same would earn interest only on simple basis to be calculated for saving deposits. The circular dated 16.11.2015 and the letter dated 02.07.2021 was relied on. It was also urged that the instructions in the proposal form did not indicate any auto renewal facility and therefore the claim of the complainant could not have been allowed by the fora below.
4. Since the Bank had paid a lower rate of interest applying the circulars as alleged by it, the complaint was filed before the State Commission alleging deficiency in service.
5. The State Commission came to the conclusion that on a perusal of the proposal forms/ application forms in respect of the three deposits it was evident that there was a tick mark for auto renewal in respect of one of the deposits, whereas other two application forms had no such endorsement, yet the facility of auto renewal would be otherwise available keeping in view the circular, RBD (R) Circular No. 35/2019 dated 01.11.2019.
6. Accordingly the State Commission held that there was an erroneous calculation of interest and accordingly allowed the complaint awarding the dues for interest along with 4% annual interest on the said amount with Rs.20,000/- as compensation and Rs.10,000/- as costs.
7. The Bank has come up raising the same issues urging that according to the relevant circulars, in the absence of any auto renewal instructions, the complaint could not have been allowed.
8. We have considered the submissions raised and we find that the State Commission has particularly relied on the circular no. 35/2019. The perusal of the other circulars relied by the Bank indicate a reference to the Damodaran Committee recommendations on auto renewal on domestic term deposits on maturity. Under the heading of payment of interest on non-renewal of overdue term deposits the interest has been allowed as per guidelines issued by the Head Office and has been quoted as under:
"Interest would be paid at savings bank rate of interest as applicable from time to time. Interest would be calculated on 'Simple basis' and would be payable w.e.f. 22.08.2008 or the date of maturity whichever is later for the overdue period along with the maturity proceeds of the matured term deposits."
9. This is followed by a letter dated 02.07.2021 once again asserting that the amount that is left unclaimed after the maturity of the deposit with the Bank shall attract interest as applicable to saving deposits or the contracted rate of interest on the matured term deposit, whichever is lower. The letter dated 02.07.2021 is extracted herein under:
"RBI/2021-22/66 DoR.SPE.REC.29/13.03.00/2021-2022 July 02, 2021 All Scheduled Commercial Banks (including RRBs) All Small Finance Banks All Local Area Banks All Primary (Urban) Co-operative Banks/ District Central Co- operative Banks/ State Co-operative Banks Dear Sir / Madam, Review of Instructions on Interest on overdue domestic deposits Please refer to Section 9 (b) of Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 dated March 3, 2016, and the Master Direction -Reserve Bank of India (Co-operative Banks- Interest Rate on Deposits) Directions, 2016 dated May 12, 2016 in terms of which if a Term Deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings deposits.
2. On a review of these instructions, it has been decided that if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower.
3. The relevant section of Master Directions are amended accordingly as indicated in the Annex.
Yours faithfully, SD/-
(Thomas Mathew) Chief General Manager"
10. The appellants have however not filed RBD (R) Circular No. 35/2019 dated 01.11.2019 issued by Head Office: Retail Banking Division of the Appellant Bank itself, that has been relied on by the State Commission to award the benefit of interest on overdue matured amounts that have remained unpaid and it is thereafter that the State Commission has allowed the claim. There is no challenge raised or any averment made in the appeal questioning the correctness of the applicability of the aforesaid circular and in fact has also not been filed along with the appeal.
11. In such circumstances, we do not find any error in the conclusion drawn by the State Commission on the basis of the material on record so as to interfere with the same in this appeal. We therefore in the absence of any such material before us to reverse the said finding, find this appeal devoid of merits which is accordingly dismissed.
