First the customer may lodge a complaint local BM, and then with grievance redressessal system of the bank narrating the total details. If possible scanned copies of the settlement letter and payment receipt may be attached.
Thereafter the complaint may be forwarded to nodal officer, chairman of the bank.
If the bank is at fault the complaint shall be resolved, and the amount shown as loan/penalties etc shall be corrected. Customer must ask for clean credit report from credit rating agencies e.g. CIBIL, Master Card International Negative List, Experian, Equifax, etc free of cost and withdrawal of his name from private financial company, and a written assurance that credibility to avail loan shall not be affected due to the said act of the bank.
If the bank does not yield then legal notice be issued and a complaint with either BO, consumer court may be filed.
If the financial company or bank has resorted to any coercion, threat, police complaint may be filed and a criminal case may be perused.