What to do in case of online bank fraud: Know RBI's directions

Mumbai: How many times have we wondered what to do when we notice suspicious transactions from our accounts?

In response to consumer concerns regarding unrecognised transactions, the Reserve Bank of India revised directions to make electronic banking transactions safer and reduced consumer liability in bank fraud cases.

Electronic banking transactions include internet banking and mobile banking as well as ATM and point-of-sales transactions. 

Here is what you should know when you notice unauthorised transactions from your account:

How do I know if I to bear the liability of the unrecognised transaction?

1. If the unrecognised transaction has been made due to contributory fraud or involves negligence or deficiency on the bank’s part, you have zero liability to bear, even if you do not notify the bank about the same.
2. Suppose a third party has breached your account and the fault is neither yours or the bank’s, you are required to notify the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction. This will ensure zero liability on your part.
3. In case the responsibility of the fraud can neither be attributed to the bank or you and you report it within four to seven working days, your maximum liability range will be between Rs 5000 to Rs 25,000 depending on the type of your account and your credit card limit.
4. Moreover, if the delay in reporting the above is beyond seven working days, your liability shall be determined as per the bank’s Board approved policy. Banks shall provide the details of this policy at the time of opening the accounts. Banks shall also display their approved policy in public domain for wider dissemination. The existing customers must also be individually informed about the bank’s policy.
5. In case an unrecognised transaction occurs because of your negligence in the form of sharing payment details with others, you are liable to bear the entire loss till the time that you notify the bank. Post your notification, further loss occurred will be borne by the bank.

What happens once you notify the bank about the unauthorised transaction (both in cases where you are partially or wholly liable and when you have zero liability)?

On receiving the notification, the bank shall credit the amount involved in the unauthorised electronic transaction your account within 10 working days from the date of notification. Banks may also at their discretion decide to waive off your liability in case of unauthorised electronic banking transactions even in cases of customer negligence.

Who proves my liability?

The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank.

How will I get to know details of the bank’s Board approved policy in case the liability is mine?

The policy shall be displayed on the bank’s website along with the details of grievance handling/ escalation procedure. You should also receive a notification regarding the same if you are an existing customer. In case you are opening  anew account, you will be notified about the same at that time.

What are other ways to keep a tab on my transactions?

The central bank has requested banks to put in place a suitable mechanism and structure for the reporting of the customer liability cases to the Board or one of its Committees. Ensure your SMS alerts from the bank are on.

“Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts, for electronic banking transactions. The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered,” said RBI.

Notify the bank in case of any unauthorised electronic banking transaction at the earliest after the occurrence of such transactions. RBI has  asked banks to provide customers with 24x7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, IVR, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting.