The State Consumer Disputes Redressal Commission in Uttarakhand, led by Ms. Kumkum Rani (President) and Mr. B.S. Manral (Member), has ruled against Punjab National Bank (PNB) for failing to act promptly after being notified of fraudulent withdrawals from a customer’s account. The court emphasized that banks must secure their technology infrastructure and respond quickly to reports of unauthorized transactions.
Case Background
The complainant, a PNB customer, had a savings account with a balance of Rs. 77,214 after withdrawing Rs. 2,000 from an ATM in Bhel. A few days later, Rs. 75,000 was fraudulently withdrawn through multiple ATM transactions in Ghaziabad. The complainant did not receive any SMS notifications for these withdrawals.
After discovering the fraud, the complainant reported it to PNB’s toll-free number and filed an FIR with the local police. Despite repeated meetings with bank officials and filing a complaint with the banking ombudsman, no action was taken. Frustrated by the lack of response, she filed a consumer complaint with the District Consumer Disputes Redressal Commission in Haridwar.
PNB’s Defense and District Commission Ruling
In its defense, PNB argued that the District Commission had no jurisdiction as the fraudulent transactions occurred in Ghaziabad. The bank also blamed the complainant for negligence and denied any case of card cloning. However, the District Commission ruled in favor of the complainant, ordering PNB to pay Rs. 75,000 with 6% interest and Rs. 5,000 as litigation costs. PNB, dissatisfied with this decision, appealed to the State Commission.
State Commission’s Observations and Final Ruling
The State Commission reviewed the Reserve Bank of India (RBI) guidelines, which highlight banks’ responsibility to secure electronic transactions and promptly address unauthorized withdrawals. It found that PNB failed to act on the complainant’s report of fraudulent activity and did not provide any evidence of steps taken to investigate the issue. The bank also did not submit ATM video footage to verify the transactions. Police investigations suggested the possibility of card cloning.
The State Commission referenced a similar case, Praveen Kumar Jain vs. HDFC Bank Ltd., where it was established that banks must protect their customers’ accounts and hold them free from liability when unauthorized transactions occur due to the bank’s shortcomings.
Ultimately, the State Commission dismissed PNB’s appeal and upheld the District Commission’s order, confirming the bank’s liability for the fraudulent withdrawals.
