POSTED BY ANTONY ON June 28, 2012 9:20 am COMMENTS (3)

Hi my father had an housing loan from a public sector bank for Rs 9,50,000. He got deceased last March. He was promptly paying the installments till his death. As I was sure he would have taken insurance I went to the Bank to ask for loan closure because the loan holder was deceased. But they said that my father has not availed insurance coverage. But when I checked the loan statements I came to know that the bank had sanctioned the loan amount including the insurance premium amount. Also I obtained the sanction letter and agreement copies through RTI act in which also it was specifically mentioned (loan amount+insurance premium amount) sanctioned. Sir I think the mistake was done by the banks side as they have sanctioned the amount but forgot to deduct the amount for insurance and take DD. I think my father after completing all the procedures given by the bank believed that he was covered by insurance and this was lapse from the banks side. Also we are really in a financially tight situation but still we continued to pay the installments till date. Please suggest the steps we should take so that we can get justice. Please help


  1. Dear Antony, from your reply, the amount was sanctioned but not deducted for insurance prem. then where was or is that amount? Please clarify.



    1. ANTONY says:

      Ashil Sir first let me thankyou for responding. Sir the loan was sanctioned for 9,50,000. The sanctioned amount is given in sanction letter as (” 9,05,000+45,000 Life Insurance Premium”). But account statement shows that the bank has not deducted the amount from the Loan account to take DD for remitting it to Insurance company. So at present we are not paying the interest for the 45,000 Insurance amount as it has not been deducted from the Loan account. Sir it was negligence from the side of Bank Staff by which they forgot to take the DD and cover the loan with Insurance. My father had already given the consent when he signed the sanction letter. Sir I need advice to the status of my case and what should be my further steps so that we can get justice.

      1. Dear Antony, please file a consumer court case for the deficiency of service on part of your bank (SBI). In case your current home loan is running on a higher interest rate, you may go for rate conversion for a lower interest rate.



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