In a bid to protect interests of the customers, the National consumer commission has ruled that the banks cannot alter terms and conditions of schemes without the consent of their customers. Ashok Bhan, head of the commission, said that a bank cannot convert the account from one scheme to another without the permission of the customer.

The ruling was in reponse to petitions filed by United India Insurance Company and Andhra bank, challenging directions passed by Andhra Pradesh State Consumer Commission asking the company to pay an amount of Rs. 2.5 lakh to the claimant, Potluri Ramchandra Rao, and recover the same from the bank.

Rao bought "Abhaya Platinum Savings Scheme" from the bank in 1998. The scheme entitled him an accidental cover of Rs. 5 lakh. The policy was changed to "Abhaya Gold Savings Bank Scheme" by the bank without the knowledge of Rao. Under the altered scheme, the cover had been reduced to 1 lakh.

Rao met with an accident on December 21, 2000 and thereafter registered his claim with the bank which rejected it on the ground that he was not covered under either of the policies as both were not in force at the time of the accident. Thus he remained without a cover in the interregnum period.

The commission ordered the bank to pay Rs. 2.5 lakh to the insurance company which paid the same amount to the claimant on directions of the commission.

In a similar step to protect consumers' interests, the National Consumer Dispute Redressal commission has asked banks to be scrap the prepayment charges and be consumer friendly.