Overdraft Scam Alert: Man Recovers Rs 1.90 Lakh

A Delhi-based businessman says he was promised an overdraft facility of up to Rs 16 lakh at an annual interest rate of just 6.5%, but ended up paying Rs 1.90 lakh for a life Insurance policy without receiving the promised credit. The incident highlights the risks of financial offers that make purchasing an insurance product a condition for securing a loan or overdraft.

Parminder Singh Sidhu says he purchased a policy from Star Union Dai-ichi Life Insurance (SUD Life) after individuals claiming to represent Axis Bank assured him that the overdraft would be arranged. However, the credit facility never materialised, and the people who had contacted him eventually stopped responding.

Sidhu later escalated his complaint through the Insurance Regulatory and Development Authority of India’s (IRDAI) Bima Bharosa grievance portal. He says he eventually received a full refund of the Rs 1.90 lakh premium, although the promised overdraft was never approved.

How the Rs 16 Lakh Overdraft Offer Was Made

According to Sidhu, the first call came on July 28, 2026, from a woman who introduced herself as Ilma and claimed to represent Axis Bank. She offered him an overdraft facility of up to Rs 16 lakh at an annual interest rate of approximately 6.5%.

Sidhu says he was told that purchasing a life insurance policy was necessary to secure the overdraft. The policy was presented as a Rs 19 lakh plan, requiring an annual premium of Rs 1.90 lakh for 10 years.

Believing that the insurance purchase would help him obtain the credit facility, Sidhu agreed to the proposal. He paid the first-year premium of Rs 1.90 lakh using his HDFC Bank credit card through BillDesk.

SUD Life issued the policy on July 30, 2026. The policy number was 03158100.

Sidhu says that after the payment, another individual identifying himself as Ashish contacted him and requested documents, including his Aadhaar and PAN details. A third person named Sumit also followed up and allegedly assured him that the overdraft would be arranged within approximately 20 days.

The identities of these individuals and their claimed associations with Axis Bank or SUD Life have not been independently verified.

Promised Overdraft Never Materialised

WhatsApp conversations shared by Sidhu show discussions about the proposed overdraft and the insurance purchase. In one message, the initial caller referred to an annual interest rate of 6.5% and indicated that an approval call would arrive that day.

Another message reportedly assured him that no one would ask for an OTP. However, Sidhu says a separate WhatsApp number displaying the SUD Life logo later requested a four-digit OTP, which he shared.

It remains unclear what transaction or process the OTP was intended to authorise and who operated the WhatsApp number. A company logo displayed on a messaging profile does not independently establish that the number belongs to an insurer or its authorised representative.

As the promised overdraft failed to arrive, Sidhu repeatedly contacted the people involved. In one message to Sumit, he asked why the overdraft account had not been opened on the expected date.

His messages from September show growing frustration. On September 12, he said he was still waiting for a call. On September 24, he asked the individual to clarify whether he had been cheated.

Sidhu also sent messages asking for an update and complaining that nobody was answering his calls. He says the people who had regularly contacted him gradually stopped responding after the insurance premium was paid.

He also approached Axis Bank with his complaint but says he did not receive the assistance he expected.

Why Insurance Purchases Linked to Loan Offers Deserve Caution

Offers promising instant loans, balance transfers and overdraft facilities at unusually low interest rates can attract consumers looking for quick access to credit. However, customers should be especially careful when a caller insists that they purchase an insurance policy or another financial product before a loan can be approved.

Insurance and overdraft facilities are separate financial products. A life insurance policy provides financial protection under specified terms, while an overdraft allows an eligible customer to withdraw or use funds up to an approved credit limit. Purchasing one does not automatically guarantee approval for the other.

Before accepting such an offer, borrowers should obtain written information about the lender, interest rate, processing charges, repayment conditions, eligibility requirements and approval status. They should independently confirm the proposal with the bank through its official website, customer service number or branch.

Consumers should also verify the identity of anyone claiming to represent a bank or insurance company. A caller’s use of a bank’s name, logo or professional-sounding designation should not be treated as proof of authorisation.

Most importantly, customers should never share OTPs, PINs, passwords, CVVs or other confidential banking credentials with callers or through unverified messages. Requests for Aadhaar, PAN or other personal documents should also be checked through official channels before the information is provided.

How the Businessman Recovered His Rs 1.90 Lakh Premium

After paying the first premium, Sidhu approached SUD Life and requested cancellation of the policy and a refund. He says the insurer initially rejected his request, citing the expiry of the free-look period.

The free-look period gives policyholders an opportunity to review an insurance policy and request cancellation within the applicable period, subject to regulatory conditions. Once that period expires, cancellation and refunds may depend on the policy terms and relevant rules.

Sidhu argued that he had not purchased the policy as an independent insurance decision. According to him, the policy was sold on the representation that it would help him obtain an overdraft facility from a bank.

After the initial rejection, he escalated the complaint through IRDAI’s Bima Bharosa grievance portal. He says the matter was resolved after a second escalation, resulting in a full refund of Rs 1.90 lakh.

Sidhu described the outcome as a resolution achieved after raising the complaint again through the grievance system. The refund allowed him to recover the premium, but the overdraft facility was never sanctioned.

Another Similar Insurance Pitch Raises Concerns

Sidhu believes that people seeking loans and overdraft facilities could be vulnerable to similar offers in which insurance products are presented as a requirement for obtaining credit. However, his individual experience does not establish how widespread or organised such practices may be.

He says he later received another call promoting a similar arrangement involving an insurance product from Ageas Federal Life Insurance. Sidhu recorded the conversation and said several people could be heard making calls in the background.

He decided to share his experience even after receiving the refund, saying his main concern was to warn other consumers. He urged people facing similar situations to raise complaints through Bima Bharosa rather than relying only on repeated calls to the individuals involved.

His experience also highlights the importance of retaining payment receipts, insurance documents, call records and WhatsApp conversations. Such evidence can help consumers explain what they were promised and support their complaints when seeking assistance.

Axis Bank Asked to Respond to Alleged Misuse of Its Name

The individuals who contacted Sidhu reportedly claimed to represent Axis Bank. However, their identities and any association with the bank have not been independently established.

IndiaToday.in said it had contacted Axis Bank for clarification on the alleged use of its name and whether the individuals identified by Sidhu were associated with the institution. The report indicated that the story would be updated after the bank’s response.

The case raises questions about how consumers can distinguish genuine banking offers from misleading sales pitches, particularly when insurance products are linked to promises of quick credit.

What Consumers Should Do Before Accepting an Overdraft Offer

Anyone receiving an unsolicited call promising a large overdraft at an unusually low interest rate should verify the offer directly with the bank before making any payment. A genuine credit proposal should include clear documentation explaining the lender, applicable charges, interest rate and approval conditions.

• Verify the caller: Contact the bank or insurer using details published on its official website rather than relying on a number provided by the caller.
• Check the loan documents: Request written confirmation of the overdraft limit, interest rate, charges and approval status.
• Keep insurance separate: Do not assume that purchasing a life insurance policy guarantees access to a loan or overdraft.
• Protect confidential information: Never disclose OTPs, PINs, passwords or CVVs to callers or unverified contacts.
• Preserve evidence: Keep payment receipts, policy documents, messages and call records if the offer appears misleading.
• Escalate complaints: Policyholders can use IRDAI’s Bima Bharosa grievance platform to raise insurance-related complaints.

Sidhu’s experience shows how an attractive credit offer can lead to a substantial financial commitment without delivering the promised facility. Although he recovered the Rs 1.90 lakh premium after escalating his complaint, the overdraft never arrived.

For consumers, the key lesson is to verify every loan or overdraft offer independently and avoid paying for an insurance policy simply because a caller claims it is necessary to unlock credit. An unusually cheap borrowing promise should always be checked before personal documents, banking information or money are handed over.