interest

If you work for an Indian bank, you need to ask your manager’s permission for spending your own money.

OK, maybe I generalize. But it is certainly true for employees of IDBI Bank.

How do I know?

Here is how…

The story begins on the 15^th of September, 2025, when I took my 84-year-old mother to IDBI Bank in Meerut to instruct them to not auto-renew a Time Deposit (Fixed Deposit – FD) held by her and instead credit the maturity proceeds to her Savings Bank account, as she had some plans for the money. The instructions were given to the bank on the reverse of the FD certificate, which had a section provided for such maturity instructions.

The same evening, by which time I had returned to Gurgaon, my mother called and told me that there was a credit message from the bank. I asked her to forward the message to me and told her that it would be in response to our visit earlier in the day. I did not give it a second thought as I was tied up and promised myself to check soon. It did strike me as odd that the transaction had been done today for an FD maturing the following day.

Could our banks have become so advanced, doing tomorrow’s transactions today? Could it be an unforeseen impact of the all-conquering AI? You never know where the next big thing will emerge from. I marvelled at the great big technological leap banks had taken while I was not looking.

When I did get around to checking the transaction a few days later, I realized that instead of the FD amount being credited along with the interest earned, the amount credited was lower than the principal amount placed by my mother in the FD.

Had the Indian economy, long known for its inflationary tendencies, suddenly turned to negative inflation, a la Japan or the Eurozone a few years back, with banks charging for keeping customer money instead of paying interest on it? As a one-time banker, I was ashamed I had not kept track of developments in banking.

With a one-time banker’s belief in the banking system of always doing the right thing as part of their DNA, I kept looking for reasons that would explain this apparent discrepancy. Not able to find a logical explanation, I did the next unnatural thing, of trying to contact the bank through the numbers on their website and ones I had in my contact list. Don’t laugh! Obviously, nothing got answered.

Not having the flexibility to visit the bank branch again, as I do not live in Meerut, I filed a complaint in the “Raise Fraud/ Dispute” section of their website. Yes, this loophole had been left open on their website. This was around the 20^th of September.

And another one, for the dispute did not end up dying in a blind alley of corporate apathy. It resulted in a phone call from the lady to whom the instruction had been handed over on 15^th September. Not only that, she could be reached through WhatsApp messaging on the same number.

Talk about weak systems. A dispute raising system that does not send the dispute towards a horrible, lonely end, followed by someone bothering to respond to it. Indian banks have a lot to answer for. Or at least IDBI Bank.

The mystery was solved when the lady called. She told me that instead of being paid on the date of maturity, the FD had been uplifted the day we went to the bank, a day before maturity. What that did was trigger the premature uplift process of the bank, which penalizes the customer for not completing the tenure. And clearly, the bank did not have the systems to prevent a premature uplift one day before the real maturity, despite no such thing being requested by the customer, nor anyone bothering to verify the reason for an 84-year-old woman to lose a significant amount as interest and not wait one day more.

Anyway, after an initial attempt at telling me that it was all our fault since we went to the bank in time to provide updated, legitimate maturity instructions, which were crystal clear, when I did not seem to agree, she admitted that it was an error on the bank’s part and that my mother would be compensated soon.

This was the beginning of a series of pleasant interactions over phone calls and WhatsApp messages, where every few days I would inquire about the non-resolution of the issue, and she would provide a new reason for why it had not been resolved. I think I might have made a recurring weekly calendar entry to check with her why it had not been done so far.

In one of the pleasant conversations, she requested me to withdraw the complaint as she would have to pay for it from her own money as she was the one responsible for the error. I politely told her that I was dealing with IDBI Bank and not her and that I was neither privy to nor responsible for the arrangement between the bank and its employees.

In another pleasant conversation, she introduced a colleague who repeated the request of withdrawing the complaint as they would have to bear the cost from their own money. I politely told them that I’d rather they bear the cost than my 84-year-old mother for no fault of hers.

On 21^st October, she messaged, after a call during which I asked her to confirm through a message, “Sir

As conveyed the resolution will be done by 31-10-2025

Regards”

On 31^st October she called to tell me that it could not be done by the 31^st because the approving manager had not been available and would not be available for another week.

Get it now?

She had to get the manager to approve the payment that she was supposed to make from her own money.

Wink wink! Nudge nudge!

Anyway, I told her that I would do what I needed to. Since a lot of time had passed without any concrete action on their part. On 10th November I filed a complaint (ID N202526016020880) with the integrated banking ombudsman set up by the Reserve Bank of India (RBI).

On 18^th November I received a call from her saying the resolution would be done the following day. Her manager, who had been too busy these past two months to speak to me while she was presumably collecting money in her account to pay my mother, came on the line as well to confirm the same.

On 19^th November the shortfall was credited to my mother’s account.

Isn’t it great that systems exist to protect the interests of the common man?

Isn’t it awful that these systems need to be resorted to for receiving fair treatment?

Isn’t it even more awful that we have a regulator intent on ensuring that regulated entities do the right thing?

“With great regret, we inform you that Quarterly interest of your FDR (130021XXXXXX-1) has been credited in your account (85512010YYYYYY) on 20/04/2024 and further it will be credited automatically in your account.”

The email had come from cb18551@canarabank.com and landed in my inbox on 22nd April at 14:14.

Despite the occasional advertisement professing their love for customers, I don’t think any Indian Public Sector Bank (PSU Bank) has been known for its love for customers. But apparently, the world had moved on and now things had come to such a pass that they are able to openly lament the fact that they had to pay interest on customer deposits, and in such unambiguous language.

Or was it a sign of a maturing ecosystem where one could say it like it really was? Bravo for a transparent world!

I was transported to a world of possibilities but brought back down to Mother Earth on the realization that the unfortunate sequence of events leading to this email had been kicked into motion through my own folly.

I went to this particular branch of Canara Bank, in Meerut, where my mother lives, on the 8^th of January to point out that the bank was supposed to pay interest every quarter on the Fixed Deposit mentioned earlier, belonging to my mother, into her Savings Bank (transaction) account, which they had failed to do thus far.

I must confess I was taken aback when the lady at the counter punched some keys on her keyboard, peered into the screen in front of her, and told me that an account setting was incorrect which had caused the issue and that she would make sure the amount due was paid forthwith. She did not blame me for the problem. She did not ask me to come back later. She just owned up. It was disgusting. In a moment of weakness, she could destroy the customer-service reputation built by these banks over a lifetime.

By the time I had reached my mother’s house, which was after extracting an assurance from the lady that the necessary correction would be made and that the same issue would not recur, the credit had come into her account.

Smug in my belief that nothing could go wrong since the frequently-changing lady at the counter whose name I did not know had assured me the issue would not recur, I returned to Gurgaon and forgot about the event.

The next date for quarterly interest to be paid was 15^th January.

Come April and here I was collecting information from various accounts, including my mother’s, for the annual income tax return filing for the financial year ended 31^st March. Guess what I find? That the interest due on 15^th January had not been credited.

It was a disappointment in a way, I cannot deny that. At the same time, it was an encouraging sign that the issue would be resolved. Why did I feel that way? Based on my extensive experience of dealing with large corporations, public or private. One had to put in the hard yards. One had to run from pillar to post and spend needless time, money and energy in pursuit of what you should have received in the first place. Only then, at some stage, the large corporation gods will smile at you and grant you what was always yours.

In my enthusiasm at seeing this faint light at the end of the tunnel, I registered a complaint on the bank’s website on 8^th April. Not much space was available for explaining the issue but I somehow managed to squeeze it in.

I had barely pressed the SEND key when a message flashed on my phone alerting me of a message from the bank. Once again, I shook my head in disappointment. These quick responses will kill the art of wasting time on follow-ups, I said to myself.

In reality, the response was received a little later, probably the following day, but since the well-designed system does not seem to have a provision for the date for the response, I can now only guess. But, it was pretty quick.

And it was really helpful, as you can see for yourself:

The case had been RESOLVED and CLOSED. Unilaterally. Unambiguously. In capital lettering.

I checked the account once again. That day. The next day. And the next day. The expected credit had not reached the account.

I cheered up again. This was something I was used to. I could handle this. I resolved to go again to Meerut, where my mother lives and where the bank branch is, on the morning of 15^th April, the next date for the quarterly credit.

There was a lady at the counter. I cannot remember if the same lady was there on the 8^th of January or not. But I presented, once again, my case to her.

I could have saved myself some breath. As soon as my explanation was over, she told me that the computer system was down and if I could come back later. I built up the courage to talk back to her and tell her to check it herself and ensure that the interest had been credited, and walked away. Whether she heard me or laughed at my temerity, I will never know. What was done was done. A PSU bank customer talking back to a bank official at the counter? Unthinkable.

The next day, 16^th April, I checked the account once again.

What do you think happened?

Exactly. Nothing. The account was deathly silent. It seemed all activity in the account had ceased. No debits and no credits.

But not for nothing am I an experienced campaigner for this type of stuff. Without demur, the same day, on 16^th April, I registered a complaint with the Banking Ombudsman appointed by the Reserve Bank of India (RBI) for redressing customer complaints against entities regulated by them. The complaint number? N202425016001199/ 2024-25.

After the deep emotional effort of escalating the complaint to the regulator, I breathed a sigh and put the case away in the deep recesses of my memory, with a rough plan of taking it out after 3 months since nothing would have happened.

It was a trickle at first on the 20^th of April, which had grown to a cascade by the 22^nd. I was besieged by calls from Canara Bank.

The first call was to apologize for the inconvenience and confirm that the money would be credited “soon.” I took heart from the word “soon.” It could be anytime in this lifetime, or later.

By the 22^nd the calls were telling me that the amount had been credited and if I was satisfied. I told them that the money had been credited but they needed to compensate my mother for the delay, by paying interest for the period of delay.

The next call asked me to check a spreadsheet they had emailed, showing the compensation for the delayed period. I checked the spreadsheet and told them that the interest needs to be calculated at the higher rate of a Fixed Deposit, around 7%, since that is where my mother would park excess funds, and not the 2.90% rate of a Savings Bank account.

They agreed. I shrugged my shoulders. What was the world coming to?

The next call asked me to check the updated spreadsheet, based on the higher rate. I checked and told them that it should be Rs. 1,006, but I would live with the Rs. 1,004 they had arrived at.

The next call told me that they would deposit the money in my account and if I would now send them an email saying I was satisfied with the resolution.

I said that I had also claimed a nominal compensation for the harassment caused to me and my mother.

Some time later I received a call from a voice claiming to be the Chief Manager and requesting me to forego the harassment compensation. The voice said that some person would have to pay out of his/ her pocket.

I advised the voice claiming to be the Chief Manager that so far what they had credited was anyway due. They had done nothing more. None of what had been paid was of a penal nature. I told them that they had three opportunities for rectification which they chose to ignore; 8th January when I first raised the issue, 8th April when I filed a complaint on the website, and 15th April when I went again to the branch. I also said it was irrelevant for me to know where the compensation would come from. It was for the bank to decide. I also said that the compensation claimed was a nominal amount of Rs. 1100 which was to make a point and not for making me rich.

The voice of the chief manager seemed to agree. Then the phone went silent and the call disconnected.

After some time, I received a call from a voice claiming to be the manager, who had been talking earlier as well, except for the brief interlude when the chief manager’s voice called me. The manager said that they would pay for the harassment as well.

I said fine and, for good measure, probably added, “Do it.”

The last call was to tell me that even the harassment claim had been settled and if I could now confirm the closure of the case.

I checked the account. The interest on delayed credit and the harassment claim had been settled by depositing cash into the account. It could be me depositing so much cash into my own account. There was no way to say it was a compensation from the bank.

I closed the case by sending them a final email:

“With regard to the mail trail below, once again, I assume it is with respect to complaint no. N202425016001199 that I lodged with the banking ombudsman on 16th April.

In this respect, the credit of Rs. 2104 (1004 interest on delayed credit and 1100 compensation for harassment) has been credited to the account in Cash by Canara Bank…

My complaint to the RBI ombudsman thus stands resolved.”

For the first time ever, I claimed compensation for harassment, which I thought happened only in the US, and received it.

I am now thinking I must complain to the RBI that they are terrorizing these poor PSU banks and forcing them to pay heed to customers.