Banks’ responsibility to prevent Online Bank Fraud

Last updated on Jun 7, 2022

Banks must ask their customers to mandatorily register for SMS alerts for electronic banking transactions. Wherever available, they must ask their customers to register for e-mail alerts, for electronic banking transactions.

The SMS alerts shall mandatorily be sent to the customers, while email alerts may be sent, wherever registered in the event of an electronic banking transaction. To facilitate the customers to report any unauthorized use of their electronic banking services, banks must provide customers with 24×7 access through multiple channels (at a minimum, via website, phone banking, SMS, e-mail, Instant Voice Response, a dedicated toll-free helpline, reporting to home branch, etc.) for reporting unauthorised transactions that have taken place and/ or loss or theft of payment instrument such as card, etc. Banks have to also enable customers to instantly respond by ‘Reply’ to the SMS and e-mail alerts so that the customers are not required to search for a web page or an e-mail address to notify the objection to an electronic transaction.

Banks have to also provide a direct link for lodging the complaints, with specific option to report unauthorised electronic transactions on the home page of their website. The loss/ fraud reporting system should ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number. The banks must record the time and date of delivery of the alerts and receipt of customer’s response, if any.

The banks cannot offer the facility of electronic transactions, other than ATM cash withdrawals, to customers who do not provide mobile numbers to the bank. On receipt of report of an unauthorised transaction from the customer, banks must take immediate steps to prevent further unauthorised transactions in the account.

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Related Resources

Lodging a complaint with the Bank

The Code of Bank’s Commitment to Customers (CBCC) enacted by the Banking Codes and Standards Board of India (BCSBI) lays down the rules.

Filing a complaint with the Banking Ombudsman

If solution provided by the bank is unsaisfactory and would like to further enquire the matter, you can approach the Banking Ombudsman

Customer Liability

There will be no customer liability for unauthorized transactions. However, negligence by the customer can attract customer liability.

Filing a complaint for Online Bank Fraud

A complaint against online bank fraud can be filed at your nearest police station by filing an FIR or online cyber cell portal.

Customer’s Right to be Protected from Online Bank Fraud

Customer's have the right to be protected from online bank fraud to receive SMS notification of all electronic banking transactions.

Maximum Customer Liability and Bank Policy

If the delay is for more than seven working days, the customer liability will be determined as per the Bank’s Board Policy