Mumbai, July 7: In an attempt to mitigate the risks involved in online transactions and promote customer protection against frauds, the Reserve Bank of India (RBI) on Thursday, laid out rules to reimburse the victims. The central bank ordered lenders to credit the customer’s account with the money in the fraud, within 10 working days, starting from the day the fraud has been reported.
A notification released by RBI about reducing ‘Liability of Customers in Unauthorized Electronic Banking Transactions’ said that the need to lay out rules for compensation was felt, given the ‘recent surge in customer grievances’ relating to the issue. Under the new rules, losses during fraudulent online transactions of all sorts, including internet banking, mobile banking, card not present (CNP) transactions), Pre-paid Payment Instruments (PPI), as well as, face-to-face/ proximity payment transactions as in an ATM, are covered.
The rules say that the victim of such a fraud will not have to suffer any losses, if she/he were to report the incident to the concerned bank, within three days of the event. If this is done, the customer will be eligible for full compensation by the lender, who will credit the lost amount to the account holder, within 10 working days. Moreover, the customer will not have to wait for the settlement of their insurance claim also, to get the lost money.
The circular also stated that banks will be able to, at their own discretion, waive off customer liability in case of an unauthorized online banking transaction, even in a case of customer negligence. The statement also warned the victims of an online banking fraud to not delay reporting the loss to their respective banks, as that will increase the chances of a permanent loss to the customer. RBI has also made SMS and email alerts mandatory in cases of any transaction that takes place using her/his account.
RBI further said that banks have to, under any circumstances, resolve a customer complaint within a period of 90 days, from the date of receipt of the complaint. However, if the customer delays in notifying the loss by more than seven working days, then the lender will be at a liberty to compensate the victim as per their Board approved policy.
Read the full notification of the RBI on ‘Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’ here.