It’s well known that in the recent past, digital payments and net banking transactions in India increased rapidly. As many people transact digitally, the threat of hacking and other types of online frauds have gone up. In the last few months, citizens have lost crores of rupees to online frauds. According to the report, from April 2017 to December 2017, 23,865 fraud cases related to credit, debit cards and internet banking were registered.
To remove fear among depositors, the Reserve Bank of India (RBI), in its annual report 2017-2018, has made it clear as to who will bear financial liability in case of unauthorized electronic banking transactions.
The RBI has also made it compulsory for all banks to collect mobile numbers of customers, so that they receive SMS after all electronic transactions.
As a bank customer, it is your responsibility to alert the bank immediately on any unauthorized banking transactions, even if there is no fault from your end.
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As per the RBI report, if the deficiency is on the part of the bank which has led to the fraudulent transaction, then you don't have to worry on the loss, as the bank is liable to bear it. In such cases, as a bank customer, your liability is zero.
If fraudulent transactions have taken place due to your negligence or fault, then the entire loss has to be borne by you, until you report the unauthorized transaction to the bank. Do so at the earliest if you are at fault.
In some cases, fraudulent transactions may take place due to a fault in the system and not because of the bank's or your fault. In such cases, your liability will be zero, if you report it to the bank within 3 working days of receiving the SMS regarding the unauthorized transaction.
In case, you report the fraud to the bank between 4-7 working days, then your maximum liability ranges from Rs 5,000 to Rs 25,000, depending on the type of account.
In case the loss due to the fraudulent transaction is reported to the bank after 7 working days, your liability is dependent on the board approved policy. The amount involved in the unauthorized electronic transaction has to be credited (shadow reversal) to the customer's bank account within 10 working days from the date of notification by the customer.
In the month of August, money from 76 bank accounts was fraudulently withdrawn with card data, stolen through compromised ATMs in Calcutta. Account holders had lost around Rs 20 Lakhs to this fraud. Fraudsters were caught and within a few days, the victims were compensated for the money lost in these frauds.