Bank restricted access to matured fixed deposits worth Rs 13.8 lakh, allowed customer to withdraw only Rs 50,000, ordered to pay Rs 14.15 lakh

A widow from Thiruvananthapuram had four fixed deposits with a local cooperative bank, together worth more than Rs 13.8 lakh. Once the deposits matured, the bank moved the full amount into her savings account. She found she could withdraw only Rs 50,000. The rest sat untouched in her account for months, no matter how many times she asked the bank to release it.

She Needed The Money Urgently

Part of the money was meant for her mother's medical treatment. Another part was meant to clear pending gold loan dues that had been piling up.


With the bank refusing to budge, she approached the Thiruvananthapuram District Consumer Disputes Redressal Commission along with a consumer rights group, asking for her money back with interest and compensation for the trouble she had been put through.

What Did The Bank Say In Its Defence

The bank did not deny that the deposits existed or that the money had been moved into her account. Its defence rested on something else entirely. It argued that a consumer commission had no business hearing the case at all, since cooperative banks are governed by the Kerala Co-operative Societies Act, a separate law with its own dispute process.

On the question of the frozen funds, the bank said its hands were tied. An enquiry under the cooperative societies law had uncovered irregularities inside the bank, it said, and the financing bank had frozen its accounts as a result.

How Were The Withdrawals Restricted

The Registrar of Cooperative Societies had stepped in with an order restricting withdrawals, directing that money could only be released as per a priority list drawn up by a specially formed committee. Until a depositor's name came up on that list, the bank said, there was little it could do.

Did The Bank Prove Its Claims

The commission was not convinced. When it came time to back up its defence with actual proof, the bank produced nothing. No affidavit, no documents, no evidence of the enquiry or the Registrar's order it had leaned on so heavily.

The woman, on the other hand, had sworn an affidavit and submitted her deposit certificates and passbook to support her claim.

What Did The Commission Say On Jurisdiction

On the question of whether the case even belonged in a consumer commission, the commission pointed to the Consumer Protection Act, which states clearly that its provisions apply in addition to any other law, not instead of it. That alone was enough to dismiss the bank's objection and keep the case alive.

What Did The Commission Rule On The Merits

The commission held that an internal enquiry against bank officials, and whatever restrictions followed from it, could not be used as a reason to deny a depositor her own money, especially a widow who told the commission this was her only source of income. It ruled that there was indeed deficiency in service and unfair trade practice on the part of the bank.

What Was The Final Order

The commission directed the bank to pay the woman Rs 13,87,408, the amount that had remained blocked, along with 9 percent interest running from the date she filed her complaint. On top of that, the bank was told to pay Rs 25,000 as compensation for the mental agony and financial strain she had gone through, and Rs 3,000 towards the cost of the case. In total, the order works out to roughly Rs 14.15 lakh.

The bank was given 30 days from the date of the order to pay up. If it misses that deadline, the amount, apart from the costs, will start drawing 9 percent interest all over again, this time from the date of the order itself until the money is actually paid.