RBI makes transactions from ATM, Credit Card and Online safer; Heres what you need to know

Key Highlights: 

• RBI provides direction for electronic banking system
• To avail zero liability, customers must notify banks in three working days
• Solving of complaint must not exceed 90 days from the date of receipt of the complaint 

To ensure, safer electronic banking transactions, the Reserve Bank of India has introduced a list of rules that needs to be followed by both customers and bankers.

RBI in a notification said, “With the increased thrust on financial inclusion and customer protection and considering the recent surge in customer grievances relating to unauthorised transactions resulting in debits to their accounts/ cards, the criteria for determining the customer liability in these circumstances have been reviewed. The revised directions in this regard are set out below.”

Electronic payment system in India is divided in to two categories – online payment transaction (mobile banking, PPI instrument, internet banking) and secondly face-to-face payment transactions (ATM, POS, etc).

In an effort to make customers feel safe about carrying electronic banking system, RBI has asked banks to put in place the following rules.

Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts, for electronic banking transactions. SMS alerts shall mandatorily be sent to the customers wherever registered.

SMS/email alerts also must have a "Reply" option for customer response so that they can easily notify banks  when an authorized transaction has taken place. 

A direct link for lodging the complaints, with specific option to report unauthorized electronic transactions shall be provided by banks on home page of their website.

The loss/ fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered complaint number.

A person is entitled to zero liability shall arise where the  unauthorized  transaction  occurs in events like contributory fraud/ negligence/ deficiency on the part of the bank and third party breach - where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system. 

In case of zero liability, the the customer must notify the bank within three working days of receiving the communication from the bank regarding the unauthorized transaction.

However, a customer will be liable for loss occurring on unauthorized transaction is when due to negligence by a customer, such as where he has shared the payment credentials. 

In such situation, 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.

In case of debit card/ bank account, the customer does not suffer loss of interest, and in case of credit card, the customer does not bear any additional burden of interest.

If a fraud is reported between four to seven working days, then the customers per transaction liability will be from Rs 5,000 - Rs 25,0000  depending on the type of accounts and credit card limit.

While, if delay in reporting goes beyond seven working days, the customer liability shall be determined as per the bank’s Board approved policy.

The burden of proving customer liability in case of unauthorized electronic banking transactions shall lie on the bank.

Once notified by the customer, the bank shall credit the amount involved in the unauthorized electronic transaction to the customer’s account within 10 working days from the date of such notification.

A complaint must be resolved in the above scenario with in the specified time but should not exceed 90 days from the date of receipt of the complaint otherwise the customer will be compensated as per provisions mentioned.