Bank has to intimate its customer about the decision to enhance interest

Bank customer was a Company manufacturing iron and steel products. To run its business from time-to-time, Company obtained loans and advances from Bank. The company wrote to the Bank requesting not to increase their interest rate. The Bank also admitted that higher interest was charged to the company and showed its willingness to consider reduction of rate with retrospective effect, The Bank had eventually agreed to reduce the rate of interest with condition that if any other bank charged higher rate it would also be charged by Bank. The Bank then charged excess interest than what was mentioned in its approved letter.  The Calcutta High Court in AIROnline 2022 CAL 451 held that the Bank has to intimate its customer about the decision to enhance interest. Any act of Bank in charging interest at different rates for different periods, is not permissible and shows non-application of mind on part of the Bank. Bank was directed to re-calculate the interest payable.