Customers will not be punished for frauds due to negligence of banks: RBI
The Reserve Bank of India revealed a draft circular on customer protection on Thursday.
The highlights of the circular stated that the customer will not be held accountable for frauds which are caused due to negligence on the part of the bank.
The customer will also not be responsible if there is a third party breach involved in the e-banking transactions.
These guidelines are placed in order to limit the liability of customers in unauthorised electronic banking transactions.
The circular stated that the customer will be held responsible if the customer’s involvement is established in the scam.
However, if the customer’s own involvement is not established, customer liability will be limited to a maximum of Rs 5,000 if he/she reports the incident within 4 to 7 working days.
What gave rise to the RBI necessitating these guidelines to be in place was the recent surge in customer grievances relating to unauthorised electronic banking transactions.
These frauds resulted in debits to customer accounts and cards which made the RBI review the criteria for determining the customer liability in these circumstances.
RBI stated that it is also open to receiving suggestions and comments from the general public on the Draft Circular.
These can be sent by post to the Chief General Manager, Department of Banking Regulation, Reserve Bank of India’s Central Office.
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