Banks Responsible for Failed Transactions and No Cash in ATMs
In landmark judgments, banks have been held as responsible for failed transactions and lack of cash in ATMs, a consumer court, has ruled.
 
With increased use of automatic teller machine (ATMs), many cases are being reported about non-availability of cash and failed transaction in the ATMs. Banks try to shirk their responsibility in such cases and Reserve Bank of India (RBI), which usually bats for the banks, and not customers, in all such generic issues.  
 
It has taken a Consumer Court in Raipur to impose a penalty of Rs2,500, including Rs1,500 as compensation for mental harassment and Rs1,000 for legal expenses, on State Bank of India (SBI) for non-availability of cash in its ATMs, says a report from LatestLaws.com
 
Raipur-based lawyer Rajiv Aggarwal, after failing to withdraw cash from SBI ATMs thrice in April 2017, had filed the petition in the district consumer forum. He also submitted photos and video recording of his failed ATM transactions due to non-availability of cash. SBI tried to put the blame on internet connectivity. However, the Forum rejected the bank’s contention terming ‘non-availability of cash at ATMs’ as ‘deficiency of service’, says a report from DailyPost.in.
 
"When banks can charge for usage of ATMs for a whole year in advance and a client is free to use any of the ATMs, then he automatically becomes a customer, irrespective of the fact, whether he has a bank account in that particular bank or not. Also when customers are penalised for no balance or for not maintaining minimum balance in their accounts, then how can a bank get away with no cash in their ATMs?" the Forum had said.
 
Similar judgments are being passed by few other consumer forums for ATM failures. In January 2018, Akola district consumer forum found SBI guilty of deficiency in services for debiting money from customer's account for a failed transaction. 
 
The complainant Pradeep Shintre approached the Forum, when the bank debited Rs5,000 from his account even though he never received any cash from the ATM. SBI did not appear before the forum, which in its ex-parte order directed the lender to refund Rs5,000 and pay Rs3,000 as compensation and Rs2,000 towards legal expenses to Shintre, says a report from the Financial Express.  
 
It may be baffling that RBI has not woken up and not yet issued a blanket directive to banks but that is how the regulator works. RBI’s recent policy change of asking banks to link floating rate loans to an external benchmark came after Moneylife Foundation filed a public interest litigation in SC submitting this as one of the prayers. 
 
According to DG Kale, former chief general manager for consumer services in the RBI, in the Raipur case, there was denial of service from the bank and hence the consumer forum ruled in the favour of the customer. For the Akola case, he says, “There is a notification issued by the RBI on failed ATM transactions that mandates banks to reimburse the money to the aggrieved customer within 12 working days. As per the notification, the compensation amount should be automatically credited to the customer’s account without any claim from the said customer. If the bank fails to reimburse the amount to the customer within this time, then it is liable to pay a penalty of Rs100 per day till the amount is credited in the customer’s account.”  
 
The main purpose for introducing ATMs was to help customers obtain account related information, cash withdrawals, and deposits without the need to interact with the bank or bank staff. This also helped banks to reduce cost of transaction per customer. However, instead of passing on the benefit of reduction in cost, banks started levying charges on customers for ATM usage. First, they restricted number of transactions and levied charges for additional transactions beyond the free transactions. 
 
Bigger Issues 
 
ATM charges and poor service is only a part of the problem of bank’s attitude to customers and their various charges. Banks are now charging even for failed card transactions or for transactions declined due to insufficient funds. This is applicable not just for ATMs but also for point of sale (PoS) transactions. If there is insufficient balance in the account due to which the transaction is declined, then banks are levying a charge of Rs17 to Rs25, plus goods and service tax (GST), says a report from TheBetterIndia.com.  
 
Banks levy a ‘fine’ if a cheque issued by a customer bounces. In the same manner, these lenders are charging a ‘service fee’ for even checking account balance or even for a failed transaction. Interestingly, the National Payments Corporation of India (NPCI) does not consider failed transaction as complete transaction. Therefore, there is no interchange charged to the card-issuing bank.    
 
Concerned with rising and arbitrary bank charges, Moneylife Foundation has sent multiple memorandums to the RBI governor Dr Raghuram Rajan. One of 9 September 2014 was on “Usage of ATMs-Rationalisation of number of free transactions”  which stated, "The setting up of ATMs by banks is to reduce not only the pressure on their counters, but also to reduce cost of operations through automation. By levying charges for use of ATMs beyond a certain number, banks are scuttling the optimum utilization of technology, thus depriving the benefits of technology to bank customers."
 
Nowhere in the world are customers charged for withdrawing money from their own accounts, while the bank earns revenue on their deposits. Banks provide this service to customers because of the spread that they earn between the interest paid to depositors and the rate at which they lend money. The spread has to cover transaction charges.
 
If banks want to start charging on transaction basis, then the spread that they earn on depositors money has to come down. The transaction charges are all the more illogical because in India, the spread on savings bank is one of the highest in the world. In fact, in India, even generally, spread is one of the highest. So in India, banks cannot charge for transactions. But then the bank customers are not organised like the banks’ own cartel and thus get penalised for withdrawing own money.
 
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    COMMENTS

    Ravindran

    9 months ago

    There is one more issue; when ATM of a bank does not work, the customer has to use ATM of another bank which is chargeable beyond 3 transactions. Further, the customer has to pay for conveyance. Hence, ideally, if an ATM of a parent bank does not dispense cash, then the customer should automatically be credited with, say, Rs 100 towards the charges for using other bank ATM as also conveyance if any.

    Centre tightens e-commerce norms to protect offline stores
    New Delhi, The government on Wednesday tightened e-commerce norms and barred online retail firms like Amazon and Flipkart from selling products of companies in which they have stakes, Ministry of Commerce and Industry said in a statement.
     
    The online retail firms (e-commerce marketplace entity) are also prohibited from mandating any company to sell its products exclusively on its platform only, as per the revised policy on FDI in e-commerce which comes into effect from February 1, 2019.
     
    "An entity having equity participation by e-commerce marketplace entity or group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity," it said.
     
    The Ministry further said that the online retail firms will not directly or indirectly influence sale price of goods and services and will maintain level playing field. 
     
    "Services should be provided by e-commerce marketplace entity or other entities in which e-commerce marketplace entity has direct or indirect equity participation or common control, to vendors on the platform at arm's length and in a fair and non-discriminatory manner," it said.
     
    Such services include fulfilment, logistics, warehousing, advertisement, marketing, payments and financing, among others. Cash back provided by group companies of marketplace entity to buyers shall be fair and non-discriminatory, it said. 
     
    "For the purposes of this clause, provision of services to any vendor on such terms which are not made available to other vendors in similar circumstances will be deemed unfair and discriminatory," the statement said.
     
    Further, the online retailers will have to file a certificate along with a report of statutory auditor to Reserve Bank of India, confirming compliance of guidelines by September 30 of every year for the preceding financial year.
     
    The decision comes in the backdrop of several complaints by traditional retail stores alleging heavy discounts by online retailers to consumers are hurting their businesses.
     
    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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    Google Play Store Gaming Apps Moonfrog, Octro Siphoning Money from Credit and Debit Cards?
    A number of bank customers, especially credit card users are reporting fraudulent money transfer from their account without fulfilling the two-factor authentication (2FA) or without the one-time passcode (OTP) mandated by the Reserve Bank of India (RBI). According to technology experts, the problem seems to be emanating from apps available on Google Play Store, and are being fooled on the assumption that Google would have included the apps on the Play store only after due diligence and verification. 
     
    A deeper analysis by Hyderabad-based technology expert Srikanth (@logic) however traces the problem to specific card game app developers like Moonfrog Labs and Octro Inc, whose name are mentioned in almost every such fraudulent transfer case that is reported.
     
    In a series of tweets, Srikanth has brought forth the fraud taking place under the name of Google.. 
     
     
    Srikanth says, “Why should Moonfrog Labs be still on Google Pay network if there are repeated instances of fraud happening on their platform and scamsters bypass RBI mandated 2FA through Google Play games?”
     
     
    Interestingly, when Srikanth raised the issue, the tweet from @cashlessconsumer was deleted while the Twitter account of one Barkha Tiwari was suspended. 
     
     
    When checked, we found that there are some apps on Google Play store that are paid and the user needs to purchase it by paying money. When the money is paid for an app, the account statement will mention it like 'Google*App Developer Name'. For example, for the above mentioned app developer, the bank statement will have an entry like 'Google Moonfrog Labs' or 'Google Octro Inc'.
     
    Bengaluru-based Moonfrog Labs is the developer of Teen Patti Gold, which it calls as India's highest grossing casino game. Its other games are LudoClub, Baahubali: The Game and Alia Bhatt: Star Life.
     
    Octro has an engineering office presence in Delhi and counts Sequoia Capital as one of its investors. The developer has games like Teen Patti, Teen Patti Live, Indian Rummy, Tambola, Carrom Live! and Poker Live!, which are available on Android,  iOS and Facebook. 
     
    On Google product forum, one Bits Computer explained how money from his account was transferred fraudulently. He says, "Same amount and problem I am not purchase or not in my order history but my 11800 + 50 + 50 + 50 +50 is deducted my account. 'Thank you for using your SBI Debit Card 459XX#### for a purchase worth Rs11800.0 on POS 248742000103177 at GOOGLE *Moonfrog Labs txn# 7353#######'."
     
    After filing a complaint, he received refund for three transactions of Rs50 each, but not for the other transaction of Rs11800 and Rs50. 
     
    Talking about unauthorised transactions taking place in the name of Octro, one Ansuman Giri says, "Many debit and credit card holders, but mostly SBI Card holders are losing money by Octro Inc. There are few other such game developers doing this also, besides 'Google Octro Inc' there are “Google Bigo” and “Google MeMe! Octro Inc, Bigo, MeMe make Online Games and hosts their games at Google Play Store. So it is not Google who is doing this. But ultimately People think it is Google!"
     
    "Without a definite solution, people are complaining everywhere; police station, bank which issued their card, customer care numbers, and consumer complaint boards. Bank and police officers have no clues about this, and they are saying, 'you must have shared your card details and we cannot do anything and you need to complain at cybercrime police station'. But there are one or two such police stations in a state, and I doubt they know the solution. And they might take few months to resolve the issue like the Bank," Giri added.
     
    Google says if the user has not done the transaction on its Play store, then she should check with family, especially a child or friends, if they have made this transaction. If the charge was unauthorised and accidental but not an act of fraud, then the user can request a refund on the Google Play website.
     
    If the user or anyone she knows had not carried out the transaction, then she can report the charges to Google support team within 120 days of the transaction. "To find your claim, you need the email address you used to submit the claim, and the claim ID sent to your email. If the charge was made via mobile carrier billing, request a refund on the Google Play website," Google says. 
     
    Our email to Google remained unanswered till writing this story. We will update this story as and when we receive reply from Google.
     
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    COMMENTS

    Francis Xavier R

    9 months ago

    my bother's sbi visa debit card is debited by google moonfrog labs... we filed the complaint with google and got back the amount after 2 weeks..

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