In a case when you report the incidence of unauthorized transaction on an immediate basis to your bank, your liability for the loss you have meted is also nil and is limited in another cases.
The RBI in its 'Statement on Developmental and Regulatory Policies issued on Wednesday said, "The Reserve Bank has issued instructions on limiting customer liability in respect of unauthorised electronic transactions involving banks and credit card issuing non-banking financial companies (NBFCs). As a measure of consumer protection, it has been decided to bring all customers up to the same level with regard to electronic transactions made by them and extend the benefit of limiting customer liability for unauthorised electronic transactions involving Prepaid Payment Instruments (PPIs) issued by other entities not covered by the extant guidelines on the subject. The guidelines will be issued by the end of December 2018.
Now measures are being suggested to extend the benefit of limited liability for consumers in cases where unuthorised transactions have been effected via mobile wallets such as Mobikwik, Oxigen and Amazon Pay.
And as per the Annual Report 2017-18, the RBI has come out with a structure for limiting liability for customers in relation to different bank thefts under different conditions. Here are the highlights of the framework:
The framework depends on primarily the involved party to the theft as well as the timing of reporting of such incidence to the authorities:
1. Liability or loss that customer has to bear comes to be zero: In a case when the unauthorized incidence has occurred due to bank or there is involvement of neither the bank nor the customer and the fault is found to be elsewhere in the system. Also, when the party who is meted the loss informs the bank latest in 3 working days of knowing about such an unscrupulous transaction.
2. Entire liability lies with the customer: In case the incidence of unauthorized transaction is due to the negligence of customer than he or she has to bear the entire loss. Also in a case, when the reporting of such an incidence with a delay of 4-7 days then the liability of the accountholder shall range in between Rs. 5000- Rs. 25,000 and that shall also depend on the category of instrument being used for the transaction.
3. If reporting is made after 7 working days : Then in such a case, banks need to revert or credit the amount involved in the transaction into the customer's bank account and thereafter it has to redress the complaint and arrive at the customers' liability in a matter of three months of receipt of the complaint
To provide a security layer, banks have been time and again asking its customers to link their mobile number with the bank accounts for transaction alert on their mobiles.