Consumer forum orders bank to compensate customer, says it did not follow RBI guidelines on online fund transfers
In a significant ruling, the District Consumer Complaints Redressal Forum has held HDFC Bank responsible for unauthorised fund transfer in an Internet banking transaction, reports PTI.
In an order dated 25th March, the Forum directed the Bank to pay a customer the whole amount which had been transferred from his HDFC Bank account without his authorisation. The Forum, headed by MG Rahatgaokar, held that the Bank had failed to implement the guidelines issued by the Reserve Bank of India (RBI), for Net banking facility.
Nikhil Phutane, the complainant, has an account with HDFC's Santa Cruz (a Mumbai suburb) branch. Qatar National Bank, where he works, transferred Rs4,60,000 to his account in October 2008. However, Mr Phutane found out in November that his bank balance was zero.
The entire amount had been transferred—through net banking—to the account of a person called Dinesh Shukla, at Lucknow. According to Mr Phutane, he never authorised HDFC Bank to add Mr Shukla's name to the list of "third party beneficiaries" on his online account.
A police complaint was lodged, and Mr Shukla and four others, including two Nigerian nationals, were arrested, and Rs70,500 was recovered from them.
Mr Phutane demanded that the Bank return him the rest of the amount, as he was not at fault.
Since HDFC Bank refused to pay him the balance amount, he filed a complaint before the Forum. The Bank argued before the Forum that either Mr Phutane had inadvertently revealed his transaction password to someone, or the computer used by him had a virus.
It also argued that after the request for fund transfer was received from his online account, an SMS was transmitted and an email was sent to Mr Phutane, for confirming the request. Since no reply came (from Mr Phutane), the funds were transferred.
But the Forum held that Bank failed to prove that such an alert had been sent. Further, it held that simply because Mr Phutane failed to respond to the mail, the Bank should not have proceeded with the transfer.
The Bank had failed to implement the "National Electronic Fund Transfer (NEFT) guidelines, issued by the RBI," the Forum held, asking it to pay Mr Phutane the balance amount. In addition, the Forum also asked the Bank to pay Rs35,000 to him, on account of "mental agony" faced by Mr Phutane, and legal expenses.