Representative image of a judge with a gavel.
Bengaluru: If customers lose money in a fraudulent transaction, the bank concerned should refund the full amount, a consumer commission in Bengaluru has ruled.
It also said that the customer is entitled to zero liability, if they flag the fraudulent transaction within three working days.
The directions were issued during the hearing of a case concerning an SBI customer, who lost Rs 4.9 lakh in a fraudulent transaction.
On June 11, 2021, Sudha Sridhar from Hosakerehalli received a text, saying her bank account was “blocked due to a KYC update within 24 hours”. Without knowing that it was a fraudulent message, Sudha shared her banking details and lost Rs 4.9 lakh.
She immediately contacted the bank’s branch office to block all transactions from her account and filed a complaint with the cybercrime police. Four months later, she received Rs 1.57 lakh, but did not hear from the bank despite repeated requests.
Sudha approached the 3rd Additional Bangalore Urban District Consumer Disputes Redressal Commission in December 2021. During the proceedings, the bank representative argued that she lost money due to her negligence for which the bank could not be held liable.
In its judgment delivered on October 16, the bench referred to a 2017 circular from the Reserve Bank of India (RBI) about limiting the customer’s liability during unauthorised electronic transactions, and asserted that it is the bank’s duty to investigate and refund the money within 10 days of the customer raising the complaint.
The bench concluded that the bank’s inability to refund the full amount within the time period is due to deficiency of service.
It directed the bank to refund the remaining Rs 3.33 lakh to the customer with 9% annual interest from June 11, 2021, till the realisation.
The bank has also been directed to pay Rs 20,000 for the mental agony and Rs 10,000 for the litigation expenses.
If the bank fails to pay the total amount within 45 days, a further 9% annual interest on the additional compensation of Rs 30,000 from the date of judgement will apply, the commission further said.