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The internet has become the breeding ground for cybercriminals to commit online crimes like data frauds, theft and hacking. Criminals are targeting online banking facilities, credit/debit/ATM cards, payment gateways and other net banking techniques to commit illegal transactions. According to a recent survey, cyber crimes rank on #3 in common crimes in India.
E-banking or net banking transactions consist of online banking and mobile banking done through online payments by the users and account holders with the banks or each other. The most common forms of banking fraud in India are:
Stolen credit or debit card
Cloning of debit or credit cards
Phishing or fraudulently making customers give their own information
Stolen PIN number or banking passwords
Hacked accounts and mobile apps
Stolen CVV and OTP number
The Reserve Bank of India has issued certain guidelines for users in case they fall victim to online banking frauds:
Banks must create their banking system and procedures in order to make way for safe net banking for customers.
The liability of customers is limited in case of any unauthorised net banking transactions.
The banks must inform their customers about SMS and email alerts for online banking transactions.
If an unauthorised online transaction has taken place because of a third party and it is reported within 3 days by the customer, the bank must credit the amount back in the customer’s account within 10 days of receiving the complaint.
If a customer delays in reporting an online banking fraud within 3 days and delays for 4-7 days, the customer will be penalised with up to Rs. 25,000 fine depending upon the type of bank account, credit card held by the customer and any gift cards used.
The liability for delay in reporting online banking fraud for Basic Savings Bank Deposit (BSBD) account is Rs. 5000; the liability for delay in reporting online banking fraud for Savings account, prepaid transactions, an overdraft account, Current account, cash credit account, gift cards accounts for MSMEs and accounts for individuals with an annual balance or limit of Rs. 25 lakhs, is Rs. 10,000; for other accounts with credit card limit of Rs. 5 lakhs, the maximum liability is Rs. 25,000.
For the loss caused by an unauthorised transaction, the bank will be held liable.
For unauthorised transactions with third party liability, any delay in reporting will attract liability up to the amount of transaction.
For a delay beyond 7 days, the customer liability will be determined in accordance with the bank’s policy approved by the Board.
The banks must resolve the customer complaint within 90 days of receiving it.
For more queries or confusion regarding the legal nitty gritty of online banking fraud in India, ask for expert legal advice from us now!
The first step is to report the crime immediately to the bank. The bank has to ensure that reasonable measures are taken to provide sage net banking to its customers. The bank must install CCTV camera in bank premises and ATM outlets, notify customers through email and SMS alert about any transaction from their account, track irregular or unusual transaction, etc.
A person who falls victim to any online banking fraud can file an application with the Adjudicating Officer under Section 46 of Information Technology Act, 2000 for lack of reasonable security measures taken by the bank. Section 43A of Information Technology Act, 2000 states that the banks and other intermediaries that do not use reasonable security measures for safe banking will be liable to pay adequate compensation to the customer. The bank has the liability to prove that it took sufficient measures to prevent any illegal and unauthorised transactions.
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