Karnataka Consumer Commission Orders Standard Chartered Bank To Pay ₹5 Lakh For Raising ₹33.83 Lakh Demand After Credit Card Closure

February 12, 2026 : The Karnataka State Consumer Disputes Redressal Commission, Bengaluru (Additional Bench) has held Standard Chartered Bank liable for unfair trade practice for raising a demand of ₹33.83 lakh years after a consumer’s credit card account had already been closed, and directed the bank to pay ₹5 lakh as compensation.

The Bench comprising Judicial Member Ravi Shankar and Member Sunita Channabasappa Bagewadi observed that the bank’s actions caused serious mental harassment and adversely affected the complainant’s financial reputation.

The case arose from an appeal filed by V.V. Venkatesh Babu, proprietor of Vasavamba Super Bazaar in Mysuru, challenging the order of the Bangalore I Additional District Consumer Disputes Redressal Commission in Consumer Complaint No. 74/2023. The District Commission had earlier awarded ₹1,00,000 as compensation with interest at 10% per annum along with ₹3,000 towards litigation costs for deficiency in service and unfair trade practice.

According to the complainant, he had paid ₹15,500 on 27 August 2010 towards settlement of his credit card dues and requested the bank to close the credit card account. The bank acknowledged the request and issued confirmation regarding the closure of the credit card on the same date.

Despite this, the bank later issued a demand notice claiming an outstanding amount of ₹33,83,173.12 and continued to seek payment through phone calls, messages and legal notices dated 25 December 2020 and 15 June 2022. The complainant responded by issuing a legal notice on 18 June 2022 stating that the credit card had already been closed in 2010.

Aggrieved by the repeated demands, he approached the District Consumer Commission alleging deficiency in service and unfair trade practice and seeking compensation for the harassment caused.

During the appeal proceedings before the State Commission, Standard Chartered Bank and Shaha Finlease Pvt. Ltd. failed to appear despite service of notice and were placed ex parte.

The State Commission noted that the complainant had clearly informed the bank about closure of the credit card after making the final payment and had also received confirmation from the bank. However, nearly seven years later, the bank issued a demand notice claiming a huge outstanding amount without providing any explanation for failing to treat the account as closed.

The Commission observed that the demand had no basis and constituted an unfair trade practice. It further noted that the complainant’s CIBIL score was adversely affected for nearly ten years due to the bank’s actions, which also led to rejection of loan applications and caused mental agony and reputational harm.

Taking these circumstances into account, the Commission held that the compensation awarded by the District Commission was inadequate. It therefore enhanced the compensation and directed the bank to pay ₹5,00,000 to the complainant for unfair trade practice.

In addition, the Commission ordered payment of ₹1,00,000 as advocate’s fees and ₹50,000 towards litigation expenses. The amounts must be paid within 30 days, failing which they will carry interest at the rate of 9% per annum until realization.

Case Title: V.V. Venkatesh Babu v. Standard Chartered Bank & Anr.
Case No.: SC/29/A/716/2024