Bengaluru: Man sues Axis Bank for deactivating credit-card, wins ₹7,000
What's the story
A retired banker from Bengaluru has won a compensation of ₹7,000 from Axis Bank after his credit card was deactivated without any notice. The abrupt action disrupted his monthly payments and streaming subscriptions. The issue was highlighted in documents reviewed by the Reserve Bank of India (RBI)'s ombudsman office. Mohan, 65, used his Axis Bank credit card for entertainment services and other bills. However, in December 2024, he started facing transaction failures.
Issue escalation
Card deactivated prematurely
Initially, Axis Bank's customer care dismissed the transaction failures as a network glitch. The problem continued even after multiple attempts to re-add the card. It was only later that Mohan discovered his card had been deactivated prematurely, and the replacement was sent to his former workplace, Canara Bank, where he hadn't worked in five years.
Address update
Inconsistent responses from customer care
Mohan tried to update his address but was asked for new KYC documents, even though his residential address hadn't changed. The responses from customer care were inconsistent, and no solution was provided. Frustrated with the lack of resolution, Mohan escalated the matter to the RBI's ombudsman office on February 3, alleging service deficiency by Axis Bank.
Bank's admission
Technology gap led to issue, says Axis Bank
In its response to the ombudsman, Axis Bank admitted to an internal process lapse. The bank cited a "technology gap" that led to the old card being deactivated before the new one was delivered and activated. It also agreed that insisting on KYC in this case was unnecessary. The ombudsman concluded that Mohan had suffered "avoidable inconvenience" due to the bank's failure to follow proper procedures.
Compensation ordered
Importance of efficient internal processes in banks
On August 12, the ombudsman ordered Axis Bank to pay Mohan ₹7,000 for the delays and inadequate response. Following the order, Axis Bank transferred the amount into Mohan's account and provided proof of transaction to the ombudsman. This case highlights the importance of efficient internal processes in banks and their impact on customers' day-to-day transactions.