In the scenario of loss due to unauthorized electronic banking transactions, RBI has issued a revamped notification that limits the liability of customers. “With the increased push on financial inclusion and customer protection and considering the recent spike in customer grievances relating to unauthorized transactions resulting in debts to customer’s accounts/cards, the criteria for determining the customer liability in these circumstances have been reviewed,” as per the spokesperson of Reserve Bank. To prevent online banking fraud, banks must design their systems and processes accordingly, it added.
Here are 10 important things to know:
1. Banks must ask their customers to register for electronic banking transactions alerts on their SMS and e-mail.
2. As per RBI rule, if unauthorized e-banking transactions have taken place, including third-party breach, are reported by the customer within three days, the amount involved will be credited back in the accounts concerned within 10 days by the bank.
3. If a customer reported a third party fraud with a delay of 4-7working days, he/she will have to face a liability of up to Rs. 25,000. However, the liability depends on the type of accounts, gift cards or credit cards.
4. For Basic Savings Bank Deposit (BSBD) accounts, the maximum liability of a customer is of Rs. 5,000. The liability for all other Savings Bank accounts, gift cards, prepaid payment, current/cash credit/overdraft accounts of MSMEs, current accounts/cash credit/overdraft accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/limit up to Rs. 25 lakh and credit cards with limit up to Rs. 5 lakh is Rs. 10,000. For other current/cash credit/overdraft accounts and credit cards with a limit of Rs. 5 lakh, the liability is of Rs. 25,000.
5. Any loss happening after the reporting of the unauthorized transaction shall be borne by the bank on behalf of the customer.
6. If the responsibility for the unauthorized transaction lies neither with the bank nor with the customer affected and when there is a delay on the part of the customer in notifying the concerned bank, the per transaction liability of the customer will be limited to the transaction value or the liability amount, whichever is lower.
7. If the delay in reported beyond seven working days, the customer liability shall be determined as per the bank’s Board approved the policy.
8. RBI also noted that there should not be a delay on customer’s part in reporting of the fraud beyond seven days.
9. Banks will ensure that the resolution of a customer complaint regarding online banking fraud happens not more than 90 days from the date of receipt of the complaint, and the customer is compensated as per pre-defined provisions.
10. Also, in case of debit card/bank account, the customer does not have to suffer a loss of interest, and in case of credit card, the customer does not bear any additional burden of interest.
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