Consumer Commission Orders Canara Bank to Pay Rs 5.04 Lakh Over Unauthorised Transactions
The District Consumer Disputes Redressal Commission, Kalaburagi, has directed the Station Bazar branch of Canara Bank to pay ₹4.84 lakh, along with interest, to a customer after three unauthorised transactions were made from his savings bank account.
Three Unauthorised Transactions
The order was passed on September 29, 2026, in a case filed by Siddayya Nandikol of Hirapur against the Branch Manager of Canara Bank, Station Bazar branch, Kalaburagi.
According to the judgment, three unauthorised transactions of ₹2 lakh, ₹2 lakh and ₹84,000 were made from Nandikol’s savings account on March 17, 2025. The total amount involved was ₹4.84 lakh. After noticing the transactions, Nandikol informed the bank and approached the Cyber Police on the same day. The bank advised him to file a complaint with the Cyber Police, which he subsequently did.
Canara Bank’s Argument
Canara Bank argued before the Commission that the transactions took place because the customer had shared his OTP and other account details. The bank denied any deficiency in service and requested that the complaint be dismissed.
However, after examining the documents and evidence submitted by both sides, the Commission found that the bank had not provided sufficient documentary evidence to prove that Nandikol had shared his OTP or other confidential banking information.
RBI Guidelines on Unauthorised Transactions
The Commission referred to the RBI guidelines on customer protection in cases of unauthorised electronic banking transactions. It noted that Nandikol had reported the transactions to both the bank and the police on the same day. Therefore, under the applicable RBI guidelines, his liability was considered zero.
The Commission also noted that banks are required to maintain proper systems and procedures, including effective fraud detection and prevention mechanisms, to protect customers from unauthorised electronic transactions.
Reference to Supreme Consumer Commission Judgment
The Commission also referred to the National Consumer Disputes Redressal Commission judgment in State Bank of India v. Prof. K.P. Sreenath. It noted the principle that the responsibility to prove that a customer was negligent or had shared an OTP, banking details or other confidential information lies with the bank.
Bank Directed to Pay ₹5.04 Lakh
The Commission, comprising in-charge president Malati Guranna and member M. Lokesh, partly allowed the complaint and held Canara Bank deficient in service.
The bank was directed to pay ₹4.84 lakh towards the unauthorised transactions, along with interest at 6% per annum from the date of the complaint until payment. The Commission also awarded ₹15,000 as compensation for deficiency in service and ₹5,000 towards litigation expenses.
This brings the total amount awarded to ₹5.04 lakh, apart from the interest payable on the ₹4.84 lakh transaction amount.
Payment to Be Made Within 45 Days
The bank has been directed to make the payment within 45 days from the date of the order. If the bank fails to comply, the Commission ordered recovery of ₹5.04 lakh with interest at 8% per annum from September 20, 2025, until the amount is recovered.
