SBI Ordered To Pay Compensation After Sharing Customer's Bank Details Without Consent
A district consumer commission in Uttar Pradesh has held the State Bank of India ( SBI ) responsible for deficiency in service after it shared a customer's personal savings account details with his former employer without obtaining his consent.
The commission observed that banks are expected to maintain strict confidentiality regarding customer information and cannot disclose personal banking details to third parties without proper authorisation. The ruling comes as an important reminder of the responsibility financial institutions have in protecting customer privacy.
The case arose from a complaint filed by a former employee who alleged that his personal bank account information had been disclosed during an ongoing legal dispute with his previous employer.
According to his complaint, while a labour dispute involving his former employer was pending before the Allahabad High Court's Lucknow Bench, the employer submitted an affidavit containing the statement of his personal savings account.
Shukla claimed he had never authorised the bank to share the details of this account. He argued that the disclosure caused him mental distress and amounted to a breach of his privacy.
He also pointed out that the account statement contained incorrect entries, which the bank later acknowledged and rectified.
Subsequently, another SBI branch confirmed in its written reply that the account statement had indeed been shared with the former employer following its request.
The bank defended its decision by stating that the employer maintained its salary account with SBI and had sought the statement to reconcile wage records. It also argued that the employer should have been included as a party in the consumer complaint because the labour dispute was still pending before the court.
It observed that the disputed account was a personal savings account and was entirely separate from the salary account through which the complainant had received his wages during his employment.
The commission noted that there was no issue regarding the salary account. Instead, the dispute centred solely on the personal savings account, which had no connection with the employer's financial records.
Since the account was personal in nature, the commission held that sharing its details without the account holder's consent violated established banking rules and amounted to poor service.
The commission observed that banks are expected to maintain strict confidentiality regarding customer information and cannot disclose personal banking details to third parties without proper authorisation. The ruling comes as an important reminder of the responsibility financial institutions have in protecting customer privacy.
The case arose from a complaint filed by a former employee who alleged that his personal bank account information had been disclosed during an ongoing legal dispute with his previous employer.
Dispute Began During Ongoing Labour Case
The complainant, Pankaj Kumar Shukla, had earlier worked for a sugar mill and maintained a personal savings account at SBI's Hargaon branch in Sitapur district.According to his complaint, while a labour dispute involving his former employer was pending before the Allahabad High Court's Lucknow Bench, the employer submitted an affidavit containing the statement of his personal savings account.
Shukla claimed he had never authorised the bank to share the details of this account. He argued that the disclosure caused him mental distress and amounted to a breach of his privacy.
He also pointed out that the account statement contained incorrect entries, which the bank later acknowledged and rectified.
Bank Admitted Sharing The Account Statement
After seeking an explanation from the bank, Shukla alleged that the local branch failed to provide a satisfactory response.Subsequently, another SBI branch confirmed in its written reply that the account statement had indeed been shared with the former employer following its request.
The bank defended its decision by stating that the employer maintained its salary account with SBI and had sought the statement to reconcile wage records. It also argued that the employer should have been included as a party in the consumer complaint because the labour dispute was still pending before the court.
Commission Finds Violation Of Banking Rules
The Consumer Commission, however, rejected the bank's justification.It observed that the disputed account was a personal savings account and was entirely separate from the salary account through which the complainant had received his wages during his employment.
The commission noted that there was no issue regarding the salary account. Instead, the dispute centred solely on the personal savings account, which had no connection with the employer's financial records.
Since the account was personal in nature, the commission held that sharing its details without the account holder's consent violated established banking rules and amounted to poor service.
Next Story