A consumer commission in Amritsar has directed a bank to compensate a man Rs 1.5 lakh after failing to inform him of a lapse in his daughter’s life insurance policy, highlighting concerns over the administration of government-backed schemes through banks.
A consumer commission in Amritsar has ordered a bank to pay Rs 1.5 lakh in compensation to a man whose daughter lost life insurance cover after a premium auto-debit failed because her account did not have enough funds.
The case centred on the Pradhan Mantri Jeevan Jyoti Bima Yojana, a government-backed life insurance scheme that offers a sum assured of Rs 2 lakh and relies on an annual auto-debit from the subscriber’s savings account. According to the Indian Express report, the complainant said he only discovered the policy had lapsed after his daughter died in a road accident and he tried to file a claim. The bank statement later showed that the premium deduction had been attempted, but the account balance was short and the debit was reversed.
In its order, the Amritsar District Consumer Commission said the bank had a duty to alert the account holder when the renewal payment failed. President Jagdishwar Kumar Chopra and member Mandeep Kaur found that the bank was deficient in service because it knew the premium had not been collected but did not inform the customer that the cover had been put at risk. The commission rejected the bank’s argument that responsibility rested entirely with the account holder to keep enough money in the account.
The ruling adds to wider concerns about how government insurance schemes are administered through banks. PMJJBY is widely used, with the India Brand Equity Foundation saying 23.36 crore people had enrolled by March 19, 2025, and that claims worth Rs 18,102 crore had been settled. But reporting by the New Indian Express last year also described complaints from customers who said they had been enrolled in such schemes without proper consent, underscoring persistent questions about transparency, communication and account-holder protection.
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