RBI Limits Customer Liability in Online Banking (Download PDF)


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‘Customer Protection – Limiting Liability of Customers in unauthorised electronic banking transactions’. This is to ease recent increase in customer grievances and also matches international standards.

Image of RBI limits Customer liability in Online Banking

Image of RBI Limits Customer Liability in Online Banking

Image of RBI limits Customer liability in Online Banking

  • Customers report to the banks regarding the loss they suffer through online banking transactions within three days, then the amount involved will be credited to their accounts within a time period of 10 days without waiting for settlement of insurance claim if any
  • Any loss suffered by the customer after reporting of the unauthorized transaction will be borne by the concerned bank.
  • “Zero liability of a customer” in the case of third party breach where the deficiency lies neither with the bank nor with the customer but elsewhere in the system.
  • Customer required to report within three working days after receiving the communication from the bank regarding the unauthorized transaction.
  • If customer reports third party fraud with a delay of four to seven working days, then liability of customer can up to Rs. 25,000.
  • Customers will also be entitled to zero liability in cases when authorized transaction occurs due to contributory fraud/negligence/deficiency on the part of the bank irrespective of whether or not the unauthorized transaction has been reported by the customer.
  • For negligence caused by the customer for example by sharing of payment credentials, customer liable to bear the entire loss until the unauthorized transaction is reported to the bank.
  • If customer reports unauthorized transaction after seven days, the liability of the customer would be per the bank’s policy.
  • The banks should mandatorily register for SMS alerts and e-mail for email alerts for electronic banking transactions.

- Published/Last Modified on: August 1, 2017


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