Consumer Commission Directs Bank to Release PMAY Housing Subsidy to Homebuyers
Bank Held Responsible for Processing Lapses
In a significant consumer protection ruling, a bank was directed to pay a housing subsidy exceeding ₹2.35 lakh to a couple after lapses in processing their claim under the Pradhan Mantri Awas Yojana (PMAY).
Facts of the Case
The complainants had obtained a housing loan and were eligible for benefits under the Credit Linked Subsidy Scheme (CLSS) of PMAY.
Despite repeated follow-ups, the subsidy amount was never credited.
Bank’s Defence
The bank argued that subsidy approval and disbursement are handled by government authorities and not by the lending institution.
Commission’s Findings
The commission held that banks are responsible for ensuring accurate submission and processing of borrower information on the PMAY portal.
The bank failed to produce convincing evidence showing that it had fulfilled all procedural requirements.
Relief Granted
The commission directed the bank to:
Pay ₹2,35,068 as subsidy.
Pay 6% annual interest.
Pay ₹10,000 towards compensation and litigation expenses.
Key Legal Takeaway
Banks handling PMAY applications must ensure proper processing and submission of borrower details. Failure to do so may constitute deficiency in service under consumer law.
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