One Credit Card. One Overlooked Request. One Bank That Compensated ₹3.21 Lakh for It.

Key Insights 

1. A credit card user received ₹3.21 lakh in compensation after Kotak Mahindra Bank failed to close his credit card on time, following a viral Reddit post detailing the prolonged dispute.

2. The Karnataka State Consumer Disputes Redressal Commission enhanced compensation to ₹5,00,000 against Standard Chartered Bank for failing to close a credit card faked  dues. 

When a Bank Ignores You, the RBI's Rules Can Make It Very Expensive

A credit card user sought to close two Kotak Mahindra Bank credit cards in May last year after the bank reduced his credit limit from ₹1 lakh to ₹10,000. Instead of closing the cards, the bank levied an annual fee.

After repeated follow-ups went unanswered, the user filed a complaint with the Banking Ombudsman. The bank finally paid compensation of ₹3,21,000.

The short-term consequence for the bank is financial and reputational. The longer-term signal is more significant.

According to RBI guidelines, if a bank fails to close a credit card within seven working days of a customer's request, provided all dues are cleared, the issuer must pay a penalty of ₹500 per day of delay.

At that rate, large delays become financially costly, and patterns of non-compliance attract regulatory scrutiny.

What the Rules Indicate and What Banks Are Overlooking?

The RBI's credit card closure framework is clear, specific, and enforceable. The table below outlines the key provisions that governed this case and similar disputes.
 

The RBI issued these guidelines on April 21, 2022, clearly stating that card issuers cannot insist on a specific closure channel that may cause delays. 

Cardholders can submit requests through multiple modes. That the bank in the Kotak case rejected an email request as invalid makes its position particularly indefensible.

Millions of Indian Cardholders Are Sitting on Rights They Don't Know They Have

India has over 100 million active credit card holders. Many have faced ignored closure requests, unexplained charges, or unresolved complaints.

In the Kotak case, the bank's officer reportedly told the customer: “It's your mistake, closure requests are not accepted via email.” The customer had already submitted a written closure request.

This kind of deflection is precisely what the RBI's framework was designed to prevent.

Consumer Courts Are Losing Patience With Banks

Legal and consumer protection experts note a clear shift in judicial tone.In the Karnataka case, the State Consumer Disputes Redressal Commission cited a Supreme Court ruling in Canara Bank v. S.

Reghukumar, where the apex court had awarded ₹5 lakh as compensation in a similar matter. Courts are now referencing precedent to push compensation higher.

The Karnataka Commission also cited the National Commission's award of ₹15 lakh in Anil Milkhiram Goyel v. Hongkong and Shanghai Banking Corporation for mental agony and litigation costs. 

The direction is unmistakable banks that ignore customers should expect escalating financial consequences, not token settlements.

Conclusion

India's system for protecting consumers has improved over time. The RBI Ombudsman is easy to reach, doesn't charge any fees, and has the power to help. More people are getting compensation for their issues. Courts are referencing previous cases to hold banks responsible. 

FAQs

Did I manage this credit card, an overlooked request, and a bank that compensated ₹3.21 lakh for it correctly? Does this sound like a scam?  

Based on recent, high-profile reports in India (April 2026), this scenario does not sound like a scam, but rather a successful, legitimate complaint escalation regarding bank negligence.

Is a 28 lakh salary in India better than a 65000 euro salary in a small town in the Netherlands, with 7 years of experience?  

For a 7-year experience level, ₹28 lakh in India offers a superior luxurious lifestyle and higher net savings, whereas €65,000 (roughly ₹58-60 lakhs) in a small town in the Netherlands offers a better quality of life, work-life balance, and long-term residency options (PR/Citizenship).