New Delhi: A Bengaluru woman has won a legal battle against the State bank of India (SBI), which has been directed by a consumer court to waive off a Rs 54.09 lakh loan, according to a media report. The public sector lender has also been told to pay compensation worth Rs 1 lakh and another Rs 20,000 in litigation expenses to the complainant, T Dharani by the Bangalore Urban Second Additional District Consumer Disputes Redressal Commission.

The consumer court noted Dharani, 36, suffered financially and mentally due to the bank's negligence.  “It amounts to deficiency of service and unfair trade practice by SBI, Whitefield Branch,” the Commission was quoted as saying in a report by The New Indian Express.

Dharani approached the consumer court after her husband Roopesh Reddy passed away on May 20, 2021. She claimed that she was unable to pay for her minor children, parents, household, and the loan.

She told the court that she completely relies on the insurance coverage that was initially opted for by the couple while checking the box in the application form of the SBI Life Insurance Company. 

However, SBI argued that they did not provide formal authorization, and that’s why the insurance company was unable to pay the sum. The bank argued that because no premium was paid to SBI Life Insurance as required under the sanction, the borrowers' lives were not insured.

The bank wouldn't cancel the loan despite her requests, she reportedly added in her complaint. The court rejected the bank’s argument that the necessary requirements were not completed for house loan insurance coverage under "SBI Life-Rinn Raksha" even though the insurers were paying a premium with interest via EMI.