The Citibank's branch in Sector 9, Chandigarh has been directed by the UT Consumer Disputes Redressal Forum to compensate for harassing the customer by adopting unfair trade practices.

Citibank had been forcing a customer named Asha Singla to repay a car loan that she had already cleared. The applicant has paid the entire loan and thereafter the bank had issued her a NOC on August 6t, 2004, whereupon the hypothecation was duly removed. However she received a notice from the bank on April 7th that stated her as a defaulter and asked her to pay the outstanding loan amount within next 7 days.

The notice issued by the bank also mentioned that if Singla failed to clear the debt then legal action against her would be taken along with repossession of the asset.

Singla further informed that she received five phone calls from police officials acting on the bank's command. These officials claim to be calling from Tees Hazari Court in Delhi and threatened to take a legal action against her if she did not pay off the loan.

The bank issued her two notices showing that a loan amount of Rs 27,264.74 was due from her. Following this, Singla approached the forum.

Looking into the matter, the forum found Citibank guilty of unfair trade practices. "The plight of the complainant shows the extent to which the banks can go to harass its customers even if nothing is due from them. The bank officials did not consult their record even after they received a copy of the complaint but seeked adjournments to file a reply in order to defend their action," said Jagroop Singh Mahal, President of the forum.

The forum ruled, "The bank officials found that their action is totally illegal and cannot be justified and offered to pay Rs 15,000 as compensation which the complainant declined."

The forum has therefore directed the bank to pay Singla an amount of Rs 50,000 as compensation.