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State-run and private banks charge customers for government insurance they don't know about: report

State-run and private banks charge customers for government insurance they dont know about: report

Banks in India have been charging customers for insurance and pension schemes of the union government even though they don't know about them. Most customers of state-run and private banks aren't aware of these schemes and did not ask for them. Nonetheless, they are paying for them.

An investigation by The Wire found that people who did not opt for Pradhan Mantri Jeevan Jyoti Bima Yojana for life insurance, Pradhan Mantri Suraksha Bima Yojana for accident insurance and Atal Pension Yojana for micro-pension are paying for them.

According to the rules, these schemes are voluntary and banks need to take explicit permission from customers before charging them under such programmes. The report says banks have been likely obtaining signatures on consent forms using lies, deceit, or coercion. They may also be enrolling customers directly from the backend.

These schemes were launched in 2015 to provide financial security to the poor in case of death, accident, or disability. Banks act as agents for a commission and the business goes to the insurance companies they collaborate with.

One such victim interviewed by The Wire said he opened an account with SBI in 2019 and every year, the account has been getting debited for insurance policies he did not buy. When he requests these debits be stopped, they will either send him after red tape or tell him he will be unsubscribed. But they will charge him again.

The general secretary of WeBankers Association told The Wire these unethical enrolments are widely in practice and senior managers threaten other employees with suspension, transfer, and loss of pay if a high number of enrolments are not delivered.

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TAGS:bank government schemes 
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