Nagpur: In a significant ruling reinforcing consumer rights, the District Consumer Disputes Redressal Commission, Nagpur, has held Bajaj Finance Ltd. guilty of deficiency in service and violation of RBI guidelines in connection with an ECS mandate dispute and freezing of a customer’s bank account for nearly 50 days.
The Commission, presided over by Sachin Y. Shimpi (President) and Member Balkrushna B. Chaudhari, partly allowed the complaint filed under Section 35 of the Consumer Protection Act by Asha Rai Badana, a resident of Tulsi Park Apartments, Dabha Ring Road, Nagpur.
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Feb 27th, 2026 - Time 11.45Hrs
Loan Sanction and ECS Dispute
According to the complaint, Bajaj Finance had sanctioned a flexi hybrid loan of Rs 3,60,000 to the complainant on January 18, 2021, for a period of 84 months. The agreed repayment structure provided for an EMI of Rs 4,500 for the first 24 months and Rs 8,564 per month for the remaining 60 months. The first EMI was scheduled for deduction on March 2, 2021.
However, due to a signature mismatch on the ECS mandate, the EMI was not deducted. The complainant deposited the amount along with a penalty of Rs 450 despite no fault on her part.
While attempting to register an e-mandate online to avoid further penalties, she discovered that the ECS mandate had been registered for Rs 50,000 with a validity period of 20 years (up to 2041) — far exceeding the actual EMI amount and loan tenure. The Commission noted that this was done without the complainant’s consent.
The complainant immediately informed the company on March 27, 2021, requesting correction of the mandate to reflect the actual EMI of Rs 8,564 and the loan period of 84 months. However, the company insisted that changes could only be made by physically visiting the branch, which was difficult during the COVID-19 restrictions prevailing at the time.
Despite allegedly stating that the ECS was not properly registered, the company deducted an EMI on April 2, 2021, even though the complainant had already paid the installment in advance on April 1.
The Commission observed that the company failed to produce documentary proof to establish that the complainant had consented to the Rs 50,000 mandate. It further noted that RBI’s circular dated April 18, 2012, clearly prohibits banks and financial institutions from altering ECS mandate amounts or tenure without the customer’s explicit approval.
Account Frozen for 50 Days
The matter escalated when on April 30, 2021, the complainant attempted to withdraw Rs 13,000 from her Union Bank savings account but found it “held up.” Due to the freeze, she could not access approximately Rs 2,41,000 available under her overdraft facility.
On May 5, 2021, the company informed her that the issue was due to “system maintenance” and would be resolved within four hours. However, despite repeated follow-ups and nearly 19 email communications, the account was restored only on June 24, 2021 — nearly 50 days later.
The Commission termed this delay “unexpected, improper and unreasonable,” observing that financial institutions have a responsibility to provide prompt service. It held that keeping a customer’s account frozen for such an extended period constituted clear deficiency in service.
Defence Rejected
Bajaj Finance argued that the complainant had initially mentioned Rs 50,000 in the ECS mandate and that deductions were made only as per EMI terms. It also claimed that technical issues led to temporary disruption and that the account was restored after resolution.
However, the Commission found that the company failed to produce documentary evidence proving the complainant’s consent for the enhanced mandate. It further held that the prolonged freezing of the account and failure to rectify the ECS error amounted to unfair trade practice and service deficiency.
Compensation Awarded
Holding the company liable, the Commission partly allowed the complaint and directed Bajaj Finance Ltd. to:
• Pay Rs 25,000 to the complainant towards physical, mental and financial harassment;
• Pay Rs 10,000 towards litigation costs;
• Comply with the order within 45 days from receipt of the certified copy.
The ruling is seen as a strong reminder that financial institutions cannot arbitrarily alter ECS mandates or freeze customer accounts without justification and must strictly adhere to RBI guidelines.
Adv Sundeep R Badana represented the complainant.
