
In 2013, a constable of the Railway Protection Force (RPF) experienced unauthorized withdrawals from his Punjab National Bank (PNB) account. A total of Rs 80,000 was allegedly withdrawn through eight unauthorized transactions conducted on June 28, 29, and 30 of 2013. After a long legal battle, it was proven in the Delhi District Consumer Commission that PNB officials were at fault for the unauthorized withdrawals.
PNB’s claim that Rs 70,000 had already been reversed in the concerned bank account on multiple dates was accepted by the Commission. However, the remaining amount of Rs 10,000 was not reversed by the bank. PNB failed to provide sufficient evidence to prove that the transaction was successful and that the complainant was responsible for it.
During the 10-year long hearing, PNB stated that the transactions were done through the MobiKwik app by the complainant. However, they failed to produce any evidence to establish that the MobiKwik app account belonged to the complainant.
The Commission ruled in favor of the bank customer, stating that PNB was at fault for not reversing the eighth transaction and ordered PNB to pay Rs 10,000 to the complainant. Additionally, PNB was directed to pay Rs 25,000 as compensation for the mental pain, agony, and harassment caused to the complainant.
Liability of Banks in Fraud Cases
According to the Reserve Bank of India’s notification, the burden of proving customer liability in case of unauthorized electronic banking transactions lies with the bank. If a customer informs the bank within a stipulated amount of time (3 days) of financial fraud, it is the bank’s duty to prove that the customer has not been a victim of fraud. If the incident is reported within 3-7 days, the bank refunds the transaction amount or the maximum liability amount, whichever is lower. After 7 days, the refund process depends on the bank’s internal policy.
For Aadhaar-enabled Payment System (AePS) frauds, the rules may vary slightly. The issuing bank must notify within five days when a customer registers a complaint along with an investigation report. If the acquirer bank is unable to prove that the liability of fraud is not at their end, they are mandated to reimburse the customer within three days.