New norms for redressal of banking frauds

If you were to notice some unauthorised transaction in your bank account and want to report it to your bank immediately.

Jul 16, 2017 10:07 IST India Infoline News Service

If you were to notice some unauthorised transaction in your bank account and want to report it to your bank immediately, you are currently required to call the customer care (helpline) number where you have to follow the instructions on the IVR system and, when you are through with the process, you have to patiently wait for the assistance of the customer care executive.

This torturous route is so time-consuming and irritating that you really feel like throwing up your hands in frustration and desperation. But even after going through all thesehassles and hurdles, you are not sure whether or not your complaint will be redressed. You may still have to run around from pillar to post to get back your own money..

But wait, now help is at hand. Realising the inconvenience caused by the IVR response system, the Reserve Bank of India (RBI) issued a circular to all banks on July 6, 2017, which reads thus: “Banks shall also enable customers to instantly respond by "Reply" to the SMS and e-mail alerts and the customers should not be required to search for a web page or an e-mail address to notify the objection, if any. Further, a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions shall be provided by banks on home page of their website….“On being notified by the customer, the bank shall credit (shadow reversal) the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days from the date of such notification by the customer (without waiting for settlement of insurance claim, if any).”

The above advisory of the RBI makes it clear that the bank have to facilitate customers to reply to the bank’s SMS or email alert instantly, which means the banks cannot send their email alerts from the ‘donotreply’ email ID or send SMS from a mobile phone facility to which the customer cannot reply. The banks have to also provide direct link on their web page to report unauthorised transaction. If the customer has duly reported to the bank of any unauthorised transaction within 3 working days of the transaction taking place, the customer’s is completely absolved of his/her liability for such transaction and the bank has to credit the entire amount involved in the unauthorised transaction to the customer’s account within 10 working days. If the customer reports the unauthorised transaction within 7 working days, the customer’s maximum liability will be limited to Rs 25,000. However, if the customer reports any fraudulent transaction after 7 working days, the redressal would be as per the bank’s approved policy.

One only hopes that the banks will implement the RBI’s policy directives at the earliest for their benefit of customers.

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