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Bank's responsibility to inform next of kin

Many persons are unaware of life insurance which comes free with their credit/debit cards but the banks that issue them have a responsibility to fulfil their duty towards its customers. If they fail to get the promised amount from the insurance company, the banks will be guilty of deficiency in service.

The National Consumer Commission held so in its judgment last week, HDFC Bank vs Pooja Kapoor. The bank had issued a gold card to Pankaj Kapoor and wife Pooja with the benefit of insurance for Rs 5 lakh in case of accidental death. The bank's arrangement was with New India Assurance. Pankaj died in an accident, but the widow did not claim the insurance benefit for a long time, though the condition in the policy prescribed a 30-day limit.

She was not aware of the benefit when the bank account was closed due to the death. The bank did not tell her either. Later, she learned about the insurance and she approached the bank. It referred the claim to the insurer, which rejected it on the ground of delay. She moved the Sonepat consumer forum.

It ordered the bank to pay full amount plus litigation expenses for causing harassment and mental agony. The state commission dismissed the bank's appeal stating that when the bank came to know of the death, it was bound to refer the claim to the insurer. The second appeal of the bank to the national commission was also dismissed, though the amount was reduced.

 Article referred: http://www.business-standard.com/article/opinion/complaints-regarding-bounced-cheques-115121300680_1.html

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