RBI: Bank customers are no longer liable in cases of fraud
But they must report illegal activity within three days of receiving alert
The Reserve Bank of India (RBI) announced on Thursday that commercial bank customers will not be held financially responsible if they become victims of fraudulent or unauthorised electronic transactions, according to media sources.
The RBI said victims should not bear any loss if the transaction is due to a fault in the bank’s security system or a third-party breach. However, the customer must report the unauthorized transaction due to a third-party fault within three days of receiving the alert from the bank, according to the revised policy on “customer protection — limiting the liability of customers in unauthorized electronic banking transactions.”
“With the increased thrust on financial inclusion and customer protection and considering the recent surge in customer grievances relating to unauthorized transactions resulting in debits to their accounts/cards, the criteria for determining the customer liability in these circumstances have been reviewed,” said a RBI statement.
“On being notified by the customer, the bank shall credit the amount involved in the unauthorized electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any).”