Initiatives like ‘Digital India’ have transformed the Indian landscape in ways more than one. The introduction of concessions on digital payments engendered the rage of making online payments across different platforms, be it on E-retailer Amazon’s site or at retail shops.

The trend of making online payments saw a boom from the day after PM Modi demonetised higher value currency notes on November 8. Online banks like PayTM rose to riches after the paradigm shift to the digital era in the Indian history.

RBI takes several steps for benefiting customers

To encourage online payment system, RBI has taken several steps to ensure internet safety while transacting at various portals. The Central Bank has introduced the concept of ‘zero liability’ and limited liability’ for bank customers.

Not only this, RBI has introduced an SMS alert system for all accounts in which any suspicious activity is anticipated. Besides, RBI has mandated the text message alert system.

Fraud Reporting Mechanism: Thanks to the new feature. You will now be able to report fraud through various portals like phone banking, SMS, email, call centre and interactive voice response. Moreover, RBI has exhorted banks to reflect unauthorised transactions of customers on their home page.

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

Penalties and Limited Liability framework

Note that the customer shall not be held liable in the following circumstances:

  • If negligence was observed on the bank’s end
  • If a third part has compromised the internet security/ cases of third party breach. However, in such a case, the customer should update the bank about the discrepancy within three days.

However, the bank may impose penalties or liability on the customer, subject to the following conditions. Here is the prescribed limit for maximum liability:

  • Saving Bank account: Rs 5000
  • Other bank accounts: Rs 10,000

However, a maximum liability of Rs 25000 will be applicable for credit cards above Rs 5 lakh. The same liability of 25000 shall apply on current, cash credit and overdraft accounts having a credit limit of Rs 25 lakh.


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