Unauthorised and fraudulent’ transaction liability on banks: Supreme Court judgment

The bank has the best of the technology available today to detect and prevent unauthorised and fraudulent.

STC NEWS MONITORING DESK
JANUARY 08 ( STC): in a huge relief to customers, the Supreme Court of India in its order dated January 03 and uploaded on Monday, has stated that banks are liable to compensate customers for “unauthorised and fraudulent” online transactions involving their accounts provided the victim lodges a complaint within the RBI-stipulated three days.
“It is the responsibility of the bank so far as such unauthorised and fraudulent transactions are concerned. The bank should remain vigilant.
The bank has the best of the technology available today to detect and prevent unauthorised and fraudulent transactions,” the bench of Justice J.B. Pardiwala and Justice R. Mahadevan said.
But it sounded a caution: “We expect the customers, ie, the account holders also to remain extremely vigilant and see to it that the OTPs generated are not shared with any third party. In a given situation and in the facts and circumstances of some case, it is the customer also who could be held responsible for being negligent in some way or
the other.”
It is pertinent to mention that the judgment comes in the case of a customer, Pallab Bhowmick, who had a savings account with an SBI branch in Guwahati, had bought some garments online from a Louis Philippe store that he wanted to return against a refund.
On October 18, 2021, the customer received a call from a man who, posing as a customer care manager with Louis Philippe, asked him to download a mobile app to secure the ₹4,000 refund. After the customer downloaded the app, a sum of ₹94,204 was siphoned off his bank account. (STC)