Bank is charging unexplained fees on my loan account

Banks in India are required to be transparent about all charges applied to loan accounts, and you have the right to demand a full explanation of any fees added without prior notice. If your bank cannot justify these charges, you can formally dispute them through internal and external grievance channels. Unexplained or unfair charges may violate Reserve Bank of India guidelines on fair banking practices.

Key points

• Banks must disclose all fees and charges upfront in the loan agreement and Key Fact Statement (KFS) provided at the time of sanction.
• The RBI has issued guidelines requiring banks to follow a fair and transparent pricing policy and to provide itemised statements on request.
• You are entitled to a written explanation for any charge applied to your account.
• If the bank's response is unsatisfactory, you can escalate to the RBI Integrated Ombudsman Scheme, which covers complaints against banks free of cost.
• Consumer forums in Indore can also hear disputes involving unfair trade practices by financial institutions.

Relevant law

The Reserve Bank of India Act, 1934 and RBI's Master Circular on Customer Service in Banks govern transparency in charges. The Consumer Protection Act, 2019 protects borrowers against unfair trade practices by banks, and complaints can be filed under its provisions. The Banking Regulation Act, 1949 also places general obligations on banks regarding fair dealing with customers.

What you can do

• Write a formal complaint to your bank's Grievance Redressal Officer, requesting a detailed written breakdown of every charge applied to your account.
• If unresolved within 30 days, file a complaint with the RBI Integrated Ombudsman through the official portal at cms.rbi.org.in, which is free and covers banks across India including Indore.
• File a complaint before the District Consumer Disputes Redressal Commission, Indore, or use the national online portal e-Daakhil to submit your consumer case digitally.
• Consult a banking or consumer law advocate in Indore to assess whether the charges constitute an unfair trade practice warranting stronger legal action.