According to the RBI, a customer shall be liable for the loss occurring due to unauthorised transactions in the following cases:

i. In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank.

ii. In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer, but lies elsewhere in the system and when there is a delay (of 4-7 working days after receiving the communication from the bank) on the part of the customer in notifying the bank of such a transaction, the per transaction liability of the customer shall be limited to the transaction value.

Further, if the delay in reporting is beyond 7 working days, the customer liability shall be determined as per the bank’s Board approved policy. Banks shall provide the details of their policy in regard to customers’ liability formulated in pursuance of these directions at the time of opening the accounts.

The central bank has also mandated banks to display their approved policy in public domain for wider dissemination. Furthermore, the existing customers must also be individually informed about the bank’s policy.