Cheque returned by bank on kyc non-compliance

S.D. Singh (Querist) 10 February 2014 This query is : Resolved
A cheque returned by the bank with remark " Fund Insufficient" , whereas there was sufficient balance. On Legal notice, bank informed, cheque was returned for non-compliance of KYC norms. now I wish to file consumer case for (i) returning the cheque with wrong remark which caused loss of goodwill. (ii) no notice/letter received for non-compliance of KYC norms even the account is 20 years old. Whether consumer compalaint is maintainable. Any other remedy ?

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Devajyoti Barman (Expert) 10 February 2014
If it is so then consumer complaint surely lies.
Go ahead with such case.

Guest (Expert) 10 February 2014
Bank has no authority to withhold your funds when your speciment signature tallies. KYC is supposed to verify the depositor's particular, not to hinder your fund flow.

Had they any doubt on fraudulent trnsaction the bank people could have contacted you to verify the genuineness of transaction. You must file a compaint in consumer forum for deficiency of service/disservice by the bank.

Rajendra K Goyal (Expert) 10 February 2014
Yes consumer case lies.

Though some Banks have issued news paper ad regarding KYC compliance to be made. It is RBI guidelines to complete KYC compliance and has imposed heavy penalty on Banks for non completion. You should have confirmed from the Bank whether your account is KYC compliance or not.

However, the Bank has returned the cheque for fund insufficient hence deficiency of service exist.

Kumar Doab (Expert) 13 February 2014
Banks like SBI has sent letters/2 reminders by speed post requesting the customers to provide docs satisfying KYC compliance.

This is as per its internal procedure.

Find out if BM in your bank/branch also received such circular.

If bank has not complied to its own internal process and procedures then BM is liable for penalty from its internal system as well.

Sudhir Kumar, Advocate (Expert) 05 September 2014
defamation case can also be considered in addition to consumer case.

S.D. Singh (Querist) 05 September 2014
thanx for the advice

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