Bank cut Rs 5.89 crore FD rate from 7.75% to 3.5%; Court orders higher interest
Initially, the FD earned interest at rates of 7.75%, 8.25% and 7.75% over different periods. However, from January 30, 2018, the bank lowered the rate to 3.5%. Challenging the reduction, the deposit holder approached the court again, arguing that the bank had cut the interest rate without any valid reason or justification.
In a recent ruling, the Delhi High Court has ordered a bank to pay higher interest rates on a fixed deposit (FD) that was cut from 7.75% to 3.5%. The FD holder, whose account balance of Rs 5.89 crore was secured in a bank until a court dispute was resolved, challenged the bank's decision to lower the interest rate without valid reason.
The court upheld the deposit holder's claim, stating that banks cannot discriminate between deposits accepted on the same date, even if held at different branches. The bank had failed to provide adequate notice or inform the third party involved about the maturity and renewal of the FD. Banks are allowed to adjust interest rates, but their actions must adhere to RBI rules and regulations, and they must treat all deposits accepted on the same date equally.
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