Investment 10 year RD - Bank changed interest during maturity calculation and considerably reduced interest payout.

S

sudhahar97

New member
Bank Name
Canara Bank
Customer Care Number
00914366220220
Loss Amount
419000
Ratings
5.00 star(s)
Opposite Party Address
Al Jubail,
Saudi Arabia
Dears,
I need advice how to proceed from here.
Currently I live in Saudi Arabia. 10 years ago, I opened an RD with Canara Bank for monthly installment of INR 25,000 for a period of 10 years with 8.5% interest rate through my NRE Account.
Now, the RD is matured on January 2025.
But, when I received the final amount I was shocked as it was much less than the final amount mentioned in the RD statement(This original amount was shown in the statement till January 2025).
When enquired with branch, no one has any idea about it and pointing the system. Finally after much follow up, they came up with a reason, that referring to some late payment of installment in the middle, they changed the interest calculation from compound interest to mere simple interest 5 years back. There is no communication to me of such major change in my RD. Not even an SMS. (I receive all other sms alerts regularly). There is no change or highlight in the RD Statement also.
I lost my precious time and also my entire investment is pointlessly resided in a simple interest bearing account for more than 5 years without me having a clue of it. Without knowing this, I was continuing my RD installments till the end.
For an RD of INR 25000 monthly installment for 10 years, I am supposed to receive INR 47,20,746.00 However I received 43,00,473.00 INR only. I lost a huge amount of more than 4 lakhs in interest.
I contacted the Branch Manager and sent my explanations and concerns through mail to Regional Manager via Branch Manager, I also followed up via phone and whatsapp conversations. But no proper response or interest from the bank to resolve the issue.
I feel like someone stole my money by conveniently pointing some outdated programs and calculations in the system and more importantly doing this without informing the customer. This is really wrong.
If they have informed me of this important change before 5 years, I would have closed my account and open a new RD account. So they denied me that opportunity also by not informing me.
How can I proceed on this as a betrayed consumer legally and recover my money lost in time and also to compensate my time and peace of mind I lost during these period fighting for my rights ?
 
Last edited:
Dear @sudhahar97


We have carefully reviewed your grievance regarding the alteration of the interest rate on your 10-year Recurring Deposit (RD) at the time of maturity by the concerned bank, leading to a considerable reduction in the maturity amount.

This action constitutes a deficiency in banking service and an unfair trade practice under the Consumer Protection Act, 2019 and violates the terms of the Reserve Bank of India (RBI) guidelines regarding term deposits.


⚖️ Legal Position:​


  • Fixed Interest Rate Protection:
    As per RBI's Master Circular on Interest Rates on Deposits, once a fixed deposit or RD is booked, the interest rate applicable at the time of deposit remains unchanged for the entire contracted period, even if the bank revises its rates later.
  • Consumer Rights Violated:
    Reducing the agreed-upon interest rate at maturity without prior consent breaches your right to fair treatment and transparency as a consumer of financial services.
  • Bank's Obligation:
    The bank must honor the original agreed interest rate and pay the maturity amount accordingly, unless there was a breach of agreed deposit terms (which must be proven and documented).


✅ Suggested Actions:​

  1. Send a Legal Notice to the Bank: Demand:
    • Payment of the maturity amount as per the original contracted interest rate.
    • Written explanation for unauthorized changes in interest calculation.
    • Compensation for mental harassment and litigation costs.
  2. Escalate the Complaint:If no proper response is received within 15–30 days:


📑 Documents Required:​

  • Original RD receipt/passbook.
  • Terms and conditions at the time of RD opening.
  • Bank’s maturity intimation/statement.
  • Communications (emails/letters) exchanged with the bank.
  • Any revised calculation sheet provided by the bank.
  • Index
  • Memo of Parties
  • Affidavit
  • Events
  • Proforma


Important Tip:
Before taking legal action, it is advisable to first escalate within the bank's internal grievance redressal mechanism, mentioning that if not resolved, you will approach the Ombudsman and Consumer Court. Skip this step if already contacted to bank.
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Note:
We can assist in:
  • Drafting professional legal notices to banks.
  • Filing consumer complaints against banks for deficiency in service.
  • Banking Ombudsman complaint drafting.
Feel free to contact us if you wish to proceed with a legal notice draft or complaint preparation.

Regards,
Support Team
 
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