Economic Transformation Council to act upon the economic turbulence, questions scheduled commercial banks If RBI policies are kept intact?
October 2020 - Fraudulence in Jharkhand, Victimised a Finance Company at Thrissur District in Kerala, and Unauthorised transaction to bank accounts in Kolkata and Delhi.
Given in detail, Oct 30, 2020, Friday, Manager of Highline India Kuries Private Limited lost connectivity to his registered mobile number. A duplicate sim card (Highline manager-owned number) of the same telecom provider was obtained by an anonymous person at Jharkand, right at the same time when the manager lost his connectivity. Because of weekend holidays, the manager had to wait for 2 days to register a complaint at the nearby telecom service provider to get his 'Sim card issue' resolved. Two days passed without knowing his registered mobile number is under the possession of an anonymous person at Jharkand; who has been looting money from his company bank accounts, using his mobile number
Highline India Kuries Private Limited lost nearly 44 Lacs from multiple accounts and all these money were transferred to various states in India.
The company immediately lodged a complaint at the nearest police station, notified banks at the next immediate working hours, and also notified the telecom service provider.
Now the concern is, it was neither the negligence of the bank nor the negligence of the customer (Highline India Kuries) that resulted in the loss of money totaling 44 Lacs.
Even though the loss didn't affect the company much, the company is in a view that the incident is a social issue, and leaving it without a fight is an injustice to the fellow beings of our country.
Who is responsible and who are all accountable?
Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions - Reserve Bank of India
'Reserve Bank of India - The apex banking institution which regulates banking policies in India issued a Customer protection circular to all the Scheduled Commercial Banks, Small Finance Banks, and Payment Banks on July 6, 2017.
Page number three of the circular defines Zero Liability of a Customer as follows;
Limited Liability of a Customer
(a) Zero Liability of a Customer
6. A customer’s entitlement to zero liability shall arise where the unauthorized transaction occurs in the following events:
(i) Contributory fraud/ negligence/ deficiency on the part of the bank (irrespective of whether or not the transaction is reported by the customer).
(ii) Third-party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system, and the customer notifies the bank within three working days of receiving the communication from the bank regarding the unauthorized transaction.
(b) Limited Liability of a Customer
7. A customer shall be liable for the loss occurring due to unauthorized transactions in the following cases:
(i) In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorized transaction to the bank. Any loss occurring after the reporting of the unauthorized transaction shall be borne by the bank.
(ii) In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of four to seven working days after receiving the communication from the bank) on the RBI, DBR,CO - 4 - continuation sheet part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value or the amount mentioned in Table 1, whichever is lower. '
The circular has not been modified nor revoked.
2019 October, Kerala High Court, Honorable Judge Muhamed Mustaque gave judgment on Tony Enterprises vs Reserve Bank of India.
The Single bench demanded bank to settle the amount being stolen from the victim's online banking account as per the RBI guidelines. Tony Enterprises claims that the judgment is not yet honored by the bank and still under legal fight. Years passed now from the incident.
Reserve Bank has introduced a clear explanation and policy on how 'Online Banking Fraudulence Case' to be handled. However, the current legal environment does not favor a case with the presence of a national-level criminal behavior.
And the victims stay victims.
The Government of India urges citizens to conduct financial transactions digitally under the brand name 'Digital India'. Not just in banking technologies, but for many industries, mobile numbers provided by the telecom companies in India are considered to be the agency to verify identity of a person by means of OTP ('One Time Password'). Whereas if the KYC policies of such telecom companies are vulnerable to forgery and impersonation, what level of security currently provided by the banks could be considered to be Justified to the requirement of security measures.
DR Sari Changaramkumarath - Director, Economic Transformation Council assembled legal advisors to move to High Courts and the Honorable Supreme Court with multiple PIL filed on this matter. Initial meetings with banks and telecom companies under queue.
Victims who have fallen prey to such online fraudulence are requested to connect with the council at director@etcmail.co.in
Comments