Bank can't be compelled to give loan: court

A bank cannot be compelled to provide loan "under any law or procedure" to a consumer and the latter cannot demand compensation for expenses incurred in applying for the process, the Delhi State Consumer Forum has ruled.

"Under no law and procedure, a bank can be compelled to give loan, and that is what the complainant wants. If in the process of furnishing documents, some expenses have been incurred by him, as argued, he can not be entitled to the compensation," Justice Barkat Ali Zaidi said.

The State Consumer Commission gave the order while dismissing an appeal by three Delhi residents against ING Vysya Bank at the admission stage in an ex-parte order.

Applicants Muni Lala Goel, Veenu Mangla and Suresh Mangla had approached the state consumer commission to appeal against a Delhi district consumer forum ruling, which had dismissed their pleas for compensation from the bank for rejecting their loan applications.

Alternatively, they had sought consumer forum's direction to the bank to advance loan to them.

However, the Delhi State Consumer Commission dismissed their appeal saying that neither a bank can be compelled to give loan nor the consumer can demand compensation incurred in the process.

Earlier, the matter was also adjudicated by the Banking Ombudsman under the Banking Ombudsman Scheme and then by its appellate authority.

The state consumer forum also observed that it cannot reopen the same proceedings now.

"The State Consumer Forum cannot reopen the proceedings and pass another judgment on the dispute. There is no question of deficiency in service involved," it said.