Upheld: ISA / savings administration complaint against State Bank Of India (UK) Limited

Decision detail

Summary

C, a business, opened a savings account and fixed deposit account with SBI in January 2023 with the intention of earning interest on deposited funds. SBI's accounts require a minimum balance of £10,000 before interest is payable. Mr K, C's director, deposited £500 and £5,000 in March 2023, totalling £5,500, which fell short of the minimum. SBI sent multiple follow-up emails before the deposits asking when funds would arrive, but after the deposits were made, SBI sent only one email about internet banking without advising that the balance was insufficient to attract interest. Mr K discovered in May 2024 that no interest had been paid. The ombudsman upheld the complaint, finding that SBI failed to provide adequate communication about the minimum balance requirement and that continued contact after the deposits would likely have prompted Mr K to deposit additional funds. SBI was directed to pay interest at 3.5% on the deposits plus £200 for inconvenience.

The Ombudsman's reasoning

The ombudsman found that SBI failed to provide adequate communication about the minimum balance requirement despite having the opportunity to do so. Although SBI sent multiple follow-up emails before the deposits were made asking when funds would arrive, it sent only one email after the deposits were made on 14 March 2023 and did not advise Mr K that the balance was insufficient to attract interest or be transferred to the fixed deposit account. Given that SBI could not confirm the terms and conditions were provided to Mr K, and given the pattern of proactive communication before the deposits, the ombudsman concluded that further contact from SBI would likely have prompted Mr K to deposit additional funds to meet the £10,000 minimum. The ombudsman therefore upheld the complaint and awarded interest at the fixed deposit rate of 3.5% that would have been earned had SBI provided better service.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website