Shri Ganpati Jurists Legal Learning
⚖️ RBI’s Rules on Customer vs. Bank Liability in Online Fraud Cases ⚖️
Did You Know?
RBI has set clear rules to protect YOU from fraud in online banking through its 6th July 2017 Circular!
KEY TAKEAWAYS
✅ ZERO LIABILITY for Customer when:
1️⃣ Fraud is due to bank’s negligence or system failure.
2️⃣ Fraud happens due to third-party breach AND reported within 3 working days.
⚠️ LIMITED LIABILITY for Customer when:
1️⃣ You share your credentials (like OTP, PIN, etc.) — full loss is on you till you report it.
2️⃣ Delayed reporting:
4-7 days: Limited liability as per RBI’s table.
After 7 days: As per bank’s board policy.
⏳ Time is Money!
The faster you report, the better your protection.
Your complaint must be resolved within 90 days, and the burden of proof lies on the bank!
Compensation Clause
Banks must credit the disputed amount (shadow reversal) within 10 working days of your complaint.
Real-World Decisions
Courts and consumer forums have upheld these rules and imposed penalties on banks for:
Failing to reverse fraudulent debits.
Not having proper fraud detection/reporting mechanisms.
Trying to shift blame onto consumers without proof.
PROTECT YOUR RIGHTS!
Always report fraud immediately and demand proper investigation. Your bank is bound by RBI’s customer-centric guidelines.
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