In an attempt to make electronic banking transactions safer, the Reserve Bank of India (RBI) has come out with new rules.
This comes as a relieving move because, according to the new notification, customers now will not suffer any loss if unauthorised electronic banking transactions are reported within three working days and the amount will be credited to their accounts within 10 days.
“With the increased thrust on financial inclusion and customer protection and considering the recent surge in customer grievances relating to unauthorised transactions resulting in debits to their accounts/cards, the criteria for determining the customer liability in these circumstances have been reviewed,” the RBI said.
Here are the top 10 rules that consumers must be aware of :
1. In case of a third party breach, there will be “zero liability of a customer.” This also means that if the fault lies “neither with the bank nor with the customer but lies elsewhere in the system,” the customer will have to notify the bank within three working days of receiving the communication from the bank regarding the unauthorised transaction.
2. If the fraud reporting crosses the three working days mark and is reported within four to seven working days, a customer’s maximum liability will be from Rs. 5,000 to Rs. 25000, depending on the type of accounts and credit card limit.
3. If the reporting of the fraudulent transaction moves beyond 7 working days, the customer’s liability will be according to the bank’s policy. Therefore the banks have been asked to clearly define the rights and obligations of customers in case of unauthorised transactions in such situations.
4. In a case, where the loss is due to negligence of the account holder (eg: sharing payment credentials, PIN numbers etc), the customer will bear the entire loss until the unauthorised transaction is reported to the bank. But if any loss occurs after reporting of the unauthorised transaction, the bank will bear the loss.
5. Forms of electronic banking transactions include internet banking, mobile banking, ATM, as well as point-of-sales transactions.
6. In case of unauthorised electronic banking transactions, the burden of proving customer liability shall lie on the bank.
7. Reversal Timeline for Zero Liability/ Limited Liability of customer:
Once the customer has reported the fraudulent transaction, the bank has to credit the amount involved to his account within 10 working days from the date reporting (without waiting for settlement of insurance claim, if any). Banks may also at their discretion decide to waive off any customer liability in case of unauthorised electronic banking transactions even in cases of customer negligence. The credit shall be value dated to be as of the date of the unauthorised transaction.
8. Banks have to ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts, for electronic banking transactions to protect them from online frauds.
9. 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.
10. A direct link for lodging the complaints, with specific option to report unauthorised electronic transactions has to be provided by banks on home page of their website. The loss/ fraud reporting system must ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number.