Reserve Bank of India in order to protect customers from unauthorised Electronic Banking Transactions has issued a draft guidelines on August 11, 2016 for public comments , considering the recent surge in customer grievances relating to unauthorised transactions resulting in erroneous debits to their accounts/cards.
It not only advised the banks to establish e systems and procedures designed to make customers feel safe about carrying out electronic banking transactions apart from other instructions but has also imposed responsibility on the customers for immediate information to the bank concerned about the unauthorised transactions .
Mechanism of Reporting of unauthorised transactions by customers to banks
Banks must ask their customers to mandatorily register for alerts for electronic banking transactions. The alerts shall be sent to the customers through different channels (email or SMS) offered by the banks. The customers must be advised to notify the bank concerned of any unauthorised electronic banking transaction at the earliest after the occurrence of such transaction. The longer the time taken to notify the bank, the higher will be the risk of loss to the bank/customer. To facilitate this, banks must provide customers with 24×7 access through multiple channels (at a minimum, via website, phone banking, SMS, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting fraudulent transactions that have taken place and/or loss or theft of payment instrument such as card, etc.
Limited Liability of the customers :
1) Where customer’s own involvement is established, customer will be liable.
2) Customer will not be liable:
Where fraud/negligence is on the part of the bank;
Third party breach where the customer notifies the bank within three working days of receiving communication from the bank regarding unauthorized transaction.
3) Where customer’s own involvement is not clearly established, customer liability will be limited to a maximum of ₹ 5000/- if he reports within 4 to 7 working days.
4) If customer reports beyond 7 working days, customer liability will be determined based on bank’s Board approved policy.
For complete draft of the circular you can go through the
circular no RBI/2016-17/DBR.No.Leg.BC. /09.07.005/2016-17 and give comments thereupon
One thought on “Great move from RBI : Draft circular on Limiting Liability of Customers in Unauthorised Electronic Banking Transactions”
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