Online Payments Now Safer As RBI Cuts Customer Liability For Fraudulent Transactions

Online and card payments are to become safer as the Reserve Bank of India on 6 July introduced the concept of ‘zero liability’ or ‘limited liability’ for the customers as far as any card or online frauds are concerned.

It is now compulsory for the banks to take full responsibility to register the customers for text message alerts and enable them to report unauthorised transactions through a reply to the warning message.

It was in August 2016 that the idea to limit customer liability was mooted in a draft circular, but it is only now that the RBI has come out with guidelines that aim at making banking rules stricter and more secured. This bulletin covers not just online transactions but also face-to-face transactions using cards.

“With the increased thrust of financial inclusion and customer protection and considering the recent surge in customer grievances relating to unauthorised transactions, the customer liability in these circumstances has been reviewed,” said the RBI.

With the enforcement of this new regulation, customers would be able to report unauthorised transactions on the homepages of the respective banks. Also, one would be able to report fraudulent practices through various mediums like that of phone banking, SMS, email, call centre and interactive voice response.

Customers will have zero liability about a fraudulent practice:

  • If there is any negligence on the part of the bank.
  • If there is a third party breach, without bank involvement, but is reported to the bank within three working days of receiving communication regarding the unauthorised transaction.The customer would be liable if the breach is not reported to the bank within three to four days of the knowledge of the operation.

The maximum liability of the customer in the case of the above two transactions will be Rs 5,000 for a basic savings bank account.

For most other accounts, the maximum liability will amount to Rs 10,000. For credit cards with limits above Rs 5 lakh and for current, cash credit and overdraft accounts of limits above Rs 25 lakh, the maximum liability will be Rs 25,000.


To know more on this, click here.

The post Online Payments Now Safer As RBI Cuts Customer Liability For Fraudulent Transactions appeared first on The Logical Indian.


Source: thelogicalindian.com

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