Public sector banks have significantly increased the amount of compensation paid for frauds and e-frauds reported by customers, reaching ₹140 crore in the fiscal year 2023-24. This marks a more than three-fold increase from the ₹42.70 crore compensated in the previous fiscal year, according to a statement by Finance Minister Nirmala Sitharaman in the Rajya Sabha on Tuesday.
Key Figures
- Top Compensation Payers:
- Union Bank of India: ₹74.96 crore
- Bank of India: ₹20.38 crore
- Indian Bank: ₹16.16 crore
- Previous Fiscal Year (FY23):
- Union Bank of India: ₹12.18 crore
- Central Bank of India: ₹11.68 crore
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RBI Guidelines on Customer Liability
In response to the rising incidents of fraud, the Reserve Bank of India (RBI) issued instructions in July 2017 to limit customer liability in unauthorized electronic transactions:
- Zero Liability:
- If the transaction is due to contributory fraud or bank negligence.
- If the customer reports the fraud within three working days of receiving information from the bank.
- Customer Liability:
- ₹5,000 to ₹25,000: If reported within 4-7 working days.
- Beyond 7 Working Days: Liability as per the bank’s board-approved policy.
- Negligence:
- If the loss is due to customer negligence, the customer bears the entire loss until the transaction is reported.