Smt. Sarojni Jain And Another Vs Union of India And 2 Others (Allahabad High Court)
The Allahabad High Court allowed the writ petition challenging the unilateral reduction of interest on a Fixed Deposit Receipt (FDR) by the respondent bank during the subsistence of the deposit. The material facts between the parties were not in dispute. The petitioners, being the daughter and wife of a deceased retired bank employee, jointly deposited ₹50,000 on 16 December 2011 in an FDR with the erstwhile Oriental Bank of Commerce. The FDR carried a fixed interest rate of 10.75% per annum for a period of ten years, with maturity on 16 December 2021 and a stated maturity value of ₹1,44,435.
In September 2020, nearly nine years after the deposit, the petitioners were informed by the bank that the applicable interest rate on the FDR was 9.25% and that the revised maturity amount was ₹1,24,772. The bank reduced the interest rate suo motu, relying on internal circulars and RBI-related clarifications which stated that the benefit of additional interest for staff or retired staff was available only where such staff member was the principal account holder in the deposit. Since the retired employee was not the principal holder, the bank treated the grant of higher interest as erroneous and claimed to have corrected the rate in line with RBI and Indian Banks’ Association guidelines after the merger of banks.
