Money & Banking
RBI draft circular seeks to protect customers from unauthorised transactions
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 
 

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COMMENTS

R Varadarajan

1 year ago

A right step in fraud prevention.

United Bank gets new chief
Pawan Kumar Bajaj has taken over as Managing Director and Chief Executive Officer of the state-run United Bank of India, the bank said in a release on Wednesday.
 
Bajaj, who has three decades of experience in the industry, took charge on Tuesday. 
 
Prior to his new appointment, Bajaj was the Executive Director of Indian Overseas Bank
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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HDFC bank denying zero balance accounts to Gurgaon villagers
A few branches of HDFC Bank in the rural areas of Gurgaon are declining to open accounts with zero balance for students, farmers and labourers under Pradhan Mantri Jan-Dhan Yojana (PMJDY) scheme, applicants said here.
 
HDFC Bank has stopped opening accounts with zero balance in Gurgaon's Manesar, Sohna, Pataudi and Taoru regions.
 
At least 10 new branches of HDFC Bank were opened in the rural belt of the district including in Sikanderpur (Badha), Shikohpur, Hayatpur and nearby villages a few years ago to provide banking facilities to the villagers.
 
Villagers said they were denied an account with zero balance even before the PMJDY scheme was launched.
 
"We opened accounts under PMJDY scheme till October last year (2015) but currently opening of accounts with zero balance has been stopped till further orders from the headquarters," a senior HDFC Bank official said on the condition of anonymity.
 
"Accounts under HDFC's bank schemes number (section) 174 and 171 (for farmers and labourers) have been banned," he said.
 
Said Paramveer, a student: "I had deposited all required documents over three months ago at Sikanderpur (Badha) branch to open an account with zero balance. But bank officials are forcing me to open the account with minimum Rs 5,000 or 2,500 balance."
 
"The bank imposes fine on the account holder if the accepted minimum balance is not maintained," added an accountant.
 
"I had applied for an account under PMJDY but was denied," said a farmer from Hayatpur.
 
"We have received dozens of applications for such accounts and we are forwarding 'genuine cases' to circle head office to seek permission to open accounts with zero balance," Praveen Mehta, a senior executive at Sikanderpur (Badha) branch, told IANS.
 
When contacted at PMJDY's national helpline number (18001801111), the call attendant said: "One can open an account under PMJDY at any bank after providing required documents and can avail benefits provided under the scheme."
 
Satish Yadav, a senior official with a government bank, told IANS: "Private banks usually refuse to open such accounts because they don't want to give benefits awarded under PMJDY scheme to the customers."
 
PMJDY is a national mission on financial inclusion to ensure access to various services like availability of basic savings bank account, access to need based credit, remittances facility, insurance and pension to the excluded sections -- weaker sections and low income groups. 
 
Accounts can be opened in any bank branch or business correspondent (Bank Mitr) outlet. PMJDY accounts are being opened with zero balance. However, if the account holder wishes to get a cheque book, she/he will have to fulfil minimum balance criteria.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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