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Funds sent to India by telegraphic transfer - delay in funds reaching final destination caused cancellation of contract - bank should have warned customer of the possibility of delay
Mr D needed to send funds to India to pay for a house he had agreed to purchase. The funds had to reach the contractor in India within a few days to meet the conditions of the purchase and sale. When Mr D went to his bank to arrange a telegraphic transfer he explained the situation to the bank officer with whom he spoke. According to Mr D, the bank officer assured him that the funds would reach the Indian account within three days.
Mr D realised that time was short. He contacted the contractor to confirm that the funds had been sent and to ask for an extra few days to settle. The contractor agreed to an extension of two days. When the funds did not arrive within the extended timeframe, the contractor cancelled the contract, as he was entitled to do under the conditions of purchase and sale The funds did not arrive until two days after the contract had been cancelled, eight days after they were sent from New Zealand.
Mr D claimed losses of approximately $3,000 because of delays in having the funds returned from India and because of changes in the exchange rate.
The bank said that the funds were successfully and correctly transmitted to its correspondent bank in India. The bank felt it could not be held responsible for the delay in the funds being transferred within the banking system in India.
I suggested to the bank that it should have been aware of the difficulties with transmission of funds within India to their final destination and should have warned Mr D of possible delay. He was unaware of such difficulties, but they are well known within the banking community. Had Mr D been made aware of the possible delay, he could have made an informed choice on whether to proceed with the transaction.
Mr D indicated he was prepared to accept $1,500, payable to a charity of his choice, to settle his complaint. The bank agreed to this and the complaint was resolved on this basis.