The Reserve Bank of India (RBI) has proposed that the customer will have no or zero liability in case of fraud being committed because of a bank's negligence or by a third party. In addition, where the customer’s own involvement is not clearly established, customer liability will be limited to a maximum of Rs5,000 if it is reported within four to seven working days, the draft circular says.
However, where customer's own involvement is established, customer will be liable, the draft circular on 'Customer Protection - Limiting Liability of Customers in Unauthorised Electronic Banking Transactions' issued by the central bank says.
The recent surge in customer grievances relating to unauthorised electronic banking transactions resulting in debits to their accounts and cards, has necessitated a review of the criteria for determining the customer liability in these circumstances, RBI said in a release.
"If customer reports beyond seven working days, customer liability will be determined based on bank's Board approved policy," said the draft, on which the RBI has sought feedback till 31 August 2016.
On being notified by the customer, the draft said the "bank should credit (shadow reversal)" the amount involved in the unauthorised electronic transaction to the customer's account within 10 working days.
"The burden of proving customer liability in case of unauthorised electronic banking transactions shall lie on the bank," the RBI proposed.
It is also proposed that banks should ensure that a complaint is resolved within 90 days and in case of debit card or bank account the customer does not lose out on interest.
Banks should also ensure that in case of credit card the customer does not bear any additional burden of interest.
The RBI said the recent surge in customer grievances relating to unauthorised electronic banking transactions resulting in debits to their accounts/cards, has necessitated a review of the criteria for determining the customer liability in these circumstances.
"Banks must ask their customers to mandatorily register for alerts for electronic banking transactions. The alerts shall be sent to the customers through different channels (email or SMS) offered by the banks," it proposed.
Suggestions or comments, on the Draft Circular can be sent by post to...
Chief General Manager,
Department of Banking Regulation,
Reserve Bank of India,
Central Office, 12th Floor,
Shahid Bhagat Singh Marg,
Mumbai-400 001, or