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RBI to limit liability norms for fraud-hit consumers

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In its efforts to establish a safety net against the fraudulent activities, the Reserve Bank of India (RBI) will soon formulate norms to limit the liabilities of consumers for unauthorised electronic transactions in their bank accounts.

“The central bank will also come down hard on lenders that charge customers exorbitant fees,” said SS Mundra, Deputy Governor, RBI.

“In its annual supervision of banks this year, the RBI will focus on the misselling of third-party products, violation of KYC norms, and usurious bank charges,” he said.

“Banks have been granted the autonomy to fix fees and charges, but it should not be used to deny services to the common man. We are seeing this worrying trend in some organisations. Imposition of usurious charges will be one of the three main focus-areas during the annual supervisory cycle this year,” Mundra said.

“If a customer’s involvement is not clearly established, customer liability will be limited to Rs 5,000 provided it is reported within seven working days,” said a draft circular released in August 2016 by RBI.

“Customers will have zero liability if there is a breach of the security architecture and systems of the bank, provided it is reported within three working days after receiving a communication from the bank,” he said.

 “The new norms are being considered in light of the increase in digital transactions after the demonetisation,” he further added.

 “There are a number of complaints of fake cheques because serial number information is being compromised, and also because the print quality of cheques is not too high. Banks have to be vigilant in this regard,” he said.

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