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What will happen to your money in case of online fraud? RBI has offered some answers

Any loss occurring after reporting of the unauthorised transaction will be borne by the bank, RBI said in its revised directions on limiting liability of customers in unauthorised electronic banking transactions.

Mail Today Bureau        Last Updated: July 7, 2017  | 11:38 IST
What will happen to your money in case of online fraud? RBI has offered some answers
RBI Governor Urjit Patel

Bank customers will not suffer any loss if money withdrawn from their accounts through unauthorised electronic banking transactions by third party fraudsters is reported within three days, according to an RBI direction issued to all banks on Thursday.

Banks will have to credit the amount involved in the customer's account within 10-days, In case the third party fraud is reported with a delay of four to seven working days, a customer will face a maximum liability of up to Rs 10,000 in case of saving bank accounts and up to 25,000 in case of credit card limits of over Rs 5 lakh.

In cases where the loss is due to negligence by the account holder (such as sharing of payment credentials), the customer will bear the entire loss until the unauthorised transaction is reported to the bank.

Any loss occurring after reporting of the unauthorised transaction will be borne by the bank, RBI said in its revised directions on limiting liability of customers in unauthorised electronic banking transactions. RBI said the revised directions are being issued amidst recent surge in customer grievances relating to unauthorised transactions resulting in debits to their accounts/cards.

There will be zero liability of a customer in case of third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system. However, the customer will have to notify the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.

A customer's will also be entitled to zero liability where the unauthorised transaction occurs due to contributory fraud/negligence/deficiency on the part of the bank irrespective of whether or not the transaction is reported by the customer, the RBI circular states. said.

The maximum liability of a customer will be Rs 25,000 in cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay of four to seven working days.

If the fraud is report after seven days, the customer liability will be determined as per the banks Board approved policy. The maximum liability of a savings bank account customer will be Rs 10,000 in such cases. Referring to reversal timeline for zero liability/limited liability of customer, RBI said the bank should credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customers account within 10 working days of reporting of the fraud.

This has to be done without waiting for settlement of insurance claim, if any, RBI added. RBI further said that 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.

 

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