30 lakh rupees suddenly disappear from a bank account of a private school in Midnapur, West Bengal through net banking fraud.
The bank refuses to take any responsibility.
The State Consumer Disputes Redressal Commission (SCDRC) and National Consumer Disputes Redressal Commission (NCDRC) both admitted that the bank had made a mistake but since, the case was not reported to the bank on time as per rules, hence a penalty of only Rs 1 lakh was imposed on the bank. .
The case went to the Supreme Court when the victim got a compensation of Rs 25 lakh.
Friends, what is the complete case?
What is the responsibility of customer and bank in this type of banking fraud?
Who will bear how much loss?
How can customers reduce their risk?
What are the complete rules related to this?
DAV school of Midnapur had accounts in Indian Bank. The school had a total of three accounts, out of which one was operated only under the Principal sign. The school had never applied to the bank for Net Banking, but an account was accidentally attached to the Principal’s personal account by the bank.
It became an easy task for the scammer. 30 lakhs were robbed from the school account through the Principal’s account.
When the matter came to light, the bank refused to accept its responsibility in any way. In the police inquiry, it became clear that there is no involvement of the principal in any way in the fraud.
Case was filed in the Consumer forum. The State Consumer Disputes Redressal Commission (SCDRC) and National Consumer Disputes Redressal Commission (NCDRC) both admitted that it was the bank’s mistake to attach the school account to the personal account, for which the bank was fined Rs.1 lakh. The account holder was considered responsible for the loss of the remaining fraud. Secondly, unauthorized transaction was not reported to bank within the time limit as per the rules, hence the bank’s liability is not created.
Ultimately, the matter went to the Supreme Court. On 18 Dec 2019, a 2 member bench of Apex court, Justice Chandrachood and Justice Hrishikesh Roy gave this verdict. Since the mistake is on the part of the bank and due to the same mistake, siphoning of amount has happened. The bank was considered liable for Rs 25 lakh. Also because the account holder did not fulfill with his responsibility of reporting the unauthorized transaction in time, he cannot be compensated fully. The customer also will have to be bear a loss of Rs 5 lakh.
(https://indiankanoon.org/doc/126600714/)
Friends, Reserve Bank of India has taken a very important step towards increasing the confidence of customers in Online Banking and reducing the financial loss caused to them in the event of any fraud. According to this you can avoid the loss of unauthorized transaction from your account. If you know about these rules of RBI and keep a little awareness, then you can avoid losses due to banking fraud.
Whether your account is in a government bank or in private, RRB or Small Finance Bank, you can make a security claim as per the instructions given by the RBI.
These customer protection instructions of RBI cover any kind of electronic transactions. Such as Net banking, phone banking, Debit / Credit card, ATM, POS. Even Prepaid Payment Instruments (PPI) i.e. Payment Wallets are also covered in it.
Friends, anyone can be the victim of such bank fraud, but he, who know about these rules and makes a claim in the bank in time, will be the only one who will be saved from his losses,.
In a response to RTI the RBI has informed that in the year 2019-20 number of online banking fraud cases reported is 85,000. The amount involved in these cases is about Rupees 1.85 lakh crores.
As the online payments are increasing, the possibilities of fraud are also increasing at the same speed.
Keeping in mind such increasing complaints, RBI has issued a guideline.
(https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NOTI15D620D2C4D2CA4A33AABC928CA6204B19.PDF)
According to this guideline, if any unauthorized transaction occurs, which is not due to the negligence of the customer and if the customer reports it to the bank in seven days, then he can avoid loss.
For this, instruction has been given to banks that,
- Whenever a customer wants to avail the facility of online transaction, then he must register the mobile number. So that SMS alert can be given for the transaction. Where possible email id should also be registered.
- Customers who cannot register mobile number should be given ATM facility only.
- It is compulsory for the bank to give SMS and email alert to the customer for all such transactions.
- Bank should advise all its customers that as soon as they get alert of any unauthorized transaction, report it to the bank immediately. If a delay is done in reporting, the greater is the loss to the customer / bank.
- Banks should put such a system so that customers can report such incidents 24 X 7. This arrangement can be done on website, through phone banking, email, IVR or dedicated toll free helpline number.
- It will be the responsibility of the bank that after registering such a complaint, it immediately confirms the complaint number with date and time, to the customer.
Zero Liability of a Customer
If there is an unauthorized transaction from the account then there is zero liability of the customer. That is, the bank will return all the money to the customer.
- If neither the customer nor the bank is at fault. There has been fraud due to a Third Party Breach in the system and,
- If the customer informs the bank within three days, then the bank will take full liability and the customer will not have to share any liability.
- If the customer gives the information to the bank in four to seven days, then the maximum liability of the customer will be between Rs.5000 to 25000 depending on the type of account, and the bank will have to bear the liability above that amount, if any.
- If the customer gives the information to the bank after seven days, then the liability of the customer will be as per the rules of the concerned bank. Which can also be 100% also.
- If the unauthorized transaction is due to any system deficiency or contributory negligence of the bank, the bank will bear full liability and the customer will not have to share any liability. In this situation, it is not mandatory for the customer to report to the bank.
- If the fraud transaction is due to a negligence of the customer, such as password / OTP or any other card detail is shared with someone, then the liability will be 100% of the customer, till the fraud has been reported to the bank. The bank will have full liability for the transactions that happen after reporting the case.
So friends, we should understand that even after taking all precautions, if any unauthorized transaction occurs in our account, then it should be reported to the bank without any delay. You can register a complaint to the nearest bank branch, but don’t forget to get an acknowledgment receipt from there.
If you are not being heard in the branch then register complaint by any of online mode provided by the bank.
