Making unauthorised fraud less painful, Reserve Bank on Thursday announced that if a user reports for the unauthorised fraud within 3 days, he will get the full refund back within 10 days. For this, the bank will not wait for the insurance company’s approval and directly credit the customer’s account.
With the above announcement, RBI also directed banks to send all the alerts related to the bank account or card transactions to the customers. Also, according to the decision, customers should be given an option to reply to the alert message in case they suspect unauthorised transaction. With this, the liability of customers has been cut down by a big scale.
The Reserve Bank of India had received a proposal to limit customer’s liability in the case of online or offline frauds in October 2016. However, this is the first time that the central bank has reacted over this to make rules more strict for the banks and provide more powers to the customers.
In its statement, RBI said that the new order will make it mandatory for the banks to link the mobile number with bank accounts and linked debit/credit cards. Banks have also been directed to provide an option to reply to the alert messages generated after all the transactions. Also, the banks will have to provide an option to report such transactions on the homepage of their website. Along with this, customers will have an option to report the fraudulent transactions via email, phone banking, SMS, call centre and voice message. The order from RBI covers online transactions as well as offline transactions where the card is swiped at a merchant location.
RBI also added that the liability of the customer will be zero or limited in case of negligince from the bank or a third party breach, where the bank is not involved. However, the same has to be reported to the bank with 72 hours of receiving the communication.
In case of a willingful fraud, cases where the customer has shared his password, the liability will be with the customer. The banks will be liable only after he has reported a transaction. Also, in case of an involvement by the thirs party, customers will be liable for the full amount if he fails to report within 7 days of receiving the communication.
In cases whers customer is proven liable, his liability will be ₹5000 for savings account. For all other types of accounts, the maximum liability will stand at ₹10,000. In case of credit cards of above 5 lakh limit, or current accounts & overdraft accounts with upto 25 lakh limit, the maximum liability wil be ₹25000.