A Catch 22 Situation

Term deposit account closed hours before maturity, penalty levied, reverted after customer establishes bank is at fault.

Recently got a SMS from my bank informing that the term deposit account I had with the bank is due to mature in a few days and I need to instruct the bank, failing which the instrument would be rolled over for another term. Since I was not in a mood to renew the deposit account, I visited the bank a day prior to the date of maturity, but never did I knew that taking the SMS seriously could land me in a situation described as “Catch 22” in English dictionary.

According to Wikipedia, the free encyclopedia, Catch 22 is a paradoxical situation from which an individual cannot escape because of contradictory rules. I will refrain from delving into the historical aspect of the word since there already exist a Wikipedia article which the readers can access following this link. However I would like to narrate my personal experience that will give readers a fair idea of what Catch 22 could mean in real terms.

A year back, I opened a recurring deposit account in a nationalised bank by paying upfront a fixed sum in cash and signed a "Standing Instruction" to remit the remaining 11 installments from my savings account at the same branch. This account was due to mature on Sunday, August 23, 2015. Few days prior to the date of maturity, the bank through a SMS intimated that the instrument (recurring deposit account) is due to mature in a few days and I need to issue instructions to the bank failing which the instrument would be rolled over to another term. Since renewal of the instant instrument for another term was not on the cards, I thought it prudent to instruct the bank to credit the maturity sum into my savings account held with the bank.

However the fact that the date of maturity falls on Sunday which is a holiday for the concerned branch, I chose to visit the bank a day prior to the date of maturity ie on Saturday, August 22, 2015. The day being half day for banking transactions, I could see a good number of customers lined up chocking the couple of counters at the branch. Even the case manager’s desk was surrounded by an unusual crowd of school students making her inaccessible for anyone other than those forming the swell. After failing in my attempt to catch the attention of the case manager, I grabbed a seat for myself in the common area and the wait for the opportunity to be heard by a bank official began.

After some time one of the two chairs in front of the branch manager’s desk was vacated and I quickly stepped in to occupy it. The manager gave a patient hearing and asked me to visit the bank on Monday, to which I read out the contents of the SMS which said if maturity claim is not preferred, it could cause rollover of the instrument for another term. At this juncture, the manager pulled out a form and advised me to fill it and submit it to the case manager. I filled in the requisite details mentioning “Maturity” as the reason and somehow handed over the form along with the passbook to the case manager. I waited for a while, but she being mobbed did not raise her head and I had to leave the premise without making an eye contact with the officer. As soon as I reached home, another SMS from the bank landed me in a paradox, unable to decide whether to rejoice promptness with which the bank processed the instruction or repent visiting the bank and submitting the instruction at their behest.

The latest SMS read my account has been credited with a sum being “premature payment” of term deposit account held with the bank. Mention of premature payment led me to conclude that the instruction that I had submitted at the behest of the bank has been treated as a request for premature closure. Unbelievable, but the bank had closed a term deposit prematurely hours before maturity that too ignoring the fact that “Maturity” was mentioned as the reason in the instruction submitted to the bank. Checking the amount credited, I found it was less than the promised maturity value, indicating “penalty” has been levied causing reduction in maturity sum.

Certainly I did not ask for premature closure, nor did I submit the so called instruction on my own. It was the bank which caused me to submit the instruction. Hence in no way I could be held liable for premature closure nor levy of penalty, particularly when “Maturity” was mentioned on the instruction. Next Monday, I dropped in at the bank and raised the issue directly with the branch manager. Initially a feeble attempt was made to fix the blame on me, but when I summoned the instruction, the manager was quick to surrender to the fact that the bank had erred in the case. Consequently the penalty amount deducted from the maturity sum was credited into my savings account at the same instant.

It may appear to be a happy ending to a tricky situation, but it came at a price. When I look back, I find, it was my fault that I took the system generated SMS too seriously. Had I rejected the SMS as hoax, I could have spent the monsoon weekend happily with my family. My actions not only attracted 2% penalty leading to reduction of maturity sum, the fear of getting it reflected in my “credit score” maintained by rating agencies is now haunting me.

Moral of the story : Not only one must be wary of spam messages, one need to be cautious of genuine ones as well, lest prepare for Catch 22!

The post was carried in the Port Blair edition of Echo of India dated 02/09/2015