A consumer body in Chhattisgarh has held State Bank of India (SBI) guilty of deficiency in service for allegedly failing to act on a customer’s complaint of unauthorised online transactions worth nearly Rs 1 lakh, and directed the bank to refund the amount with interest.
A bench of president Dakeshwar Prasad Sharma and members Nirupama Pradhan and Anil Kumar Agnihotri of the Raipur District Consumer Disputes Redressal Commission also awarded Rs 10,000 for mental agony and Rs 5,000 towards litigation expenses to the woman customer.
“According to the RBI guidelines, since the complainant immediately reported the unauthorised transaction to the concerned police station and also made a complaint before the opposite party (bank) within three working days, the opposite party was required, as per Clause 6(2) of the aforesaid RBI guidelines, to refund the amount of the unauthorised transaction to the complainant. However, by not refunding the said amount, it committed deficiency in service and unfair trade practice,” the commission said on July 27.
The bench said the complainant had immediately reported the unauthorised transaction to the police station and also submitted a complaint to the bank. In such a situation, the bank should have taken necessary action to “put a hold on the amount involved in the transaction in question”, but it did not take any such action, the forum pointed out.
The complainant, a 23-year-old woman and an account holder with the SBI, alleged that Rs 99,900 was fraudulently withdrawn from her savings account through seven unauthorised online transactions on March 30, 2019. She stated that she had not requested or authorised any such money transfers.
After receiving the transaction alerts, she took her bank statement and reported the unauthorised transactions to the Cyber Cell on the same day. She also informed SBI in writing on April 2, 2019, asking the bank to reverse the transactions and take legal action. She also sent a legal notice on April 6, 2019, but got no response.
She argued that despite receiving the complaint within the prescribed period, SBI failed to take appropriate action or refund the disputed amount, amounting to deficiency in service. She relied on the RBI guidelines on customer liability for unauthorised electronic banking transactions, arguing that she had promptly reported the fraud and was therefore entitled to protection under the zero-liability provisions.
SBI denied liability, arguing that the woman had activated internet banking herself, linked her registered mobile number and used a one-time password facility. The bank claimed that the transactions were technically successful and could have occurred because her user ID, password or other confidential information had been shared with another person.
It was contended that the transactions were either carried out by herself or by someone to whom she had disclosed her private/confidential banking information.
The bank further argued that since the transactions had been successfully authenticated through the internet banking system and OTP mechanism, the amount could not be reversed, and SBI was not responsible for the loss.
The commission noted that Rs 99,900 had been transferred from the woman’s account through seven online transactions on March 30, 2019, and that she had not sought any internet money transfer facility when opening the account. The order underscored that SBI failed to produce evidence showing that it had conducted any investigation after receiving the woman’s complaint. The bank was expected to investigate the disputed transactions and take steps to put a hold on the transferred amount.
Relying on the RBI guidelines on unauthorised electronic banking transactions, the commission observed that where the customer reports an unauthorised transaction within three working days, the customer is entitled to zero liability in cases covered by the guidelines.
Since the woman had reported the transactions to the police immediately and to SBI within three working days, the commission held that the bank was required to refund the disputed Rs 99,900. Its failure to do so amounted to deficiency in service and unfair trade practice.
The judgment reinforces that banks cannot simply shift the burden onto customers in cases of unauthorised digital transactions. Where a customer promptly reports the fraud within the RBI-prescribed period, the bank must investigate and take appropriate steps, including refunding the disputed amount. SBI’s failure to do so was held to be a deficiency in service.
Consumers facing similar grievances may contact the consumer helpline in their respective states (Chhattisgarh helpline: 1800-233-3663) or dial the National Consumer Helpline at 1915 for assistance.
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Jagriti Rai works with The Indian Express (Digital), where she writes from the vital intersection of law, gender, and society. Working on a dedicated legal desk, she focuses on translating complex legal frameworks into relatable narratives, exploring how the judiciary and legislative shifts empower and shape the consciousness of citizens in their daily lives. Expertise Socio-Legal Specialization: Jagriti brings a critical, human-centric perspective to modern social debates. Her work focuses on how legal developments impact gender rights, marginalized communities, and individual liberties. Diverse Editorial Background: With over 4 years of experience in digital and mainstream media, she has developed a versatile reporting style. Her previous tenures at high-traffic platforms like The Lallantop and Dainik Bhaskar provided her with deep insights into the information needs of a diverse Indian audience. Academic Foundations: Post-Graduate in Journalism from the Indian Institute of Mass Communication (IIMC), India’s premier media training institute. Master of Arts in Ancient History from Banaras Hindu University (BHU), providing her with the historical and cultural context necessary to analyze long-standing social structures and legal evolutions. ... Read More
