SBI’s 31 paise fiasco


State Bank of India (SBI) has hit the print and social media for its (mis)handling of a service request. The bank is trolled for non-compliance of a request from the purchaser of a land belonging to one of its borrowers. Finally, the Honourable High Court of Gujarat had to intervene in the dispute valuing just 31 paise! Is it unbelievable? But it is true.

The genesis of the issue

Verma Brothers had purchased 79 acres of agricultural land from Pashabhai brothers and others in Zolapur Village of Ahmedabad’s Sanand Taluk during Dec 2019. The sellers had borrowed two crop loans from SBI amounting to Rs.4.55 lakhs. The borrowers had repaid the entire loan amount. The Verma brothers had approached the Revenue Department for mutation of land records, which was rejected citing that ‘no due certificate’ from SBI was not annexed. This made Verma brothers approach the SBI branch with a request to issue no due certificate. The bank was evasive and not ready to accept any payment made by the Verma brothers to clear the loan amount due which was just 31 paise. Due to the negative response from the bank branch, they approached the Deputy Collector.  Despite three notices from them, the last one being 16th September 2020, the bank remained silent and did not respond to the request.

High Court of Gujarat’s reproach

Left with no other option, Verma brothers approached the Honourable High Court of Gujarat in Dec 2020. The case came up before the Gujarat High Court 15 times. During the penultimate hearing on 27 April, the court reproached the bank for not issuing the no-due certificate. The Court observed that “The Banking Regulation Act provides that anything less than 50 paise is not to be counted (as outstanding dues).” 

A day later, the SBI issued the no-due certificate.  SBI informed the court on 2 May this year that it had issued the ‘no-due certificate’ on 28 April “after contacting the borrowers and taking them into confidence”. Thus on that day the case was disposed off.


  • The bank at the last instance, after being reprimanded by the High Court issued the “no due certificate” to the borrower. This should have happened at the first instance so that the bank could have saved its face.
  • The outstanding loan amount, as stated by the bank is just 31 paise! This does not augur well for the bank management to drag it for so long!
  • The bank should not have indulged in inter se disputes between the parties, as observed by the Court.
  • 29 long months for the purchasers to get the mutation of land records in their names on technical grounds of 31 paise being the loan outstanding is unacceptable.
  • What made the bank not to settle the issue at the Revenue department or at Deputy Collector’s Office and instead went on to put up a defense before the Court but to end up admonished!

SBI, being a public sector bank is answerable to the general public and is expected to be considerate and judicious in its dealing with the customers.


  1. Hope such articles bring in a better sense of banking law and practice to the bank authorities.

  2. For an outstanding of 31 paise bank has to spend several thousands which is peoples money. Wiser sense should prevail on the decision makers.

  3. Bankers should be customer friendly rather than Bank friendly. Rules and procedures are there to serve the people cause… The article is nothing but a lesson..

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