Bengaluru: Bank, finance firm fined Rs 6.5 lakh for failing to close credit card

Bengaluru: The Karnataka State Consumer Disputes Redressal Commission has ordered a bank and a finance firm to pay Rs 6.5 lakh to a customer for failing to close his credit card, and demanding nearly Rs 34 lakh despite no transactions.

In 2022, Mysuru businessman VV Venkatesh Babu filed a consumer complaint against Standard Chartered Bank and Shaha Finlease for failing to close his credit card despite a request made 12 years earlier.

Babu said he did not use the credit card even once since its issuance. When he sought closure in 2010, the bank demanded Rs 15,500, which he paid.

In 2022, the bank issued him a legal notice, demanding Rs 33,83,173. Babu filed a complaint before the Bangalore District Consumer Commission, which, in 2024, ordered Standard Chartered Bank and Shaha Finlease to pay him Rs 1 lakh as compensation.

However, Babu approached the state commission, stating that the compensation was inadequate for the harassment caused by the bank, the damage to his CIBIL score, and the rejection of his loans.

He also hired advocate Abhishek MR to argue his case.

The state commission agreed that the Rs 1-lakh compensation was insufficient.

On February 12, 2026, it enhanced the compensation to Rs 5 lakh and ordered the respondents to pay an additional Rs 1 lakh as lawyer fee and Rs 50,000 towards litigation expenses.

The respondents have been directed to pay Rs 6.5 lakh within 30 days of the order. In case of failure, the amount shall carry 9 per cent interest till realisation.

RBI on card closure

On April 21, 2022, the Reserve Bank of India (RBI) issued a guideline stating that the credit card issuer must honour request to close within seven working days, ensuring the cardholder cleared all dues.

Post closure, they must inform the cardholder of the status either by email or text or similar mode.

Cardholders can submit the closure request via multiple channels such as the helpline, dedicated email, Interactive Voice Response (IVR), a prominently visible link on the website, internet banking, mobile app or any other mode.

The card issuer cannot insist on sending a closure request by post or other means that may cause delays. If card issuers fail to complete the account closure process within seven working days, they will incur a penalty of Rs 500 per calendar day of delay payable to the cardholder until the account is closed, provided there is no outstanding balance.