October 31, 12:11Aaj Tak

What to do if money is debited from a bank account without notification: RBI refund rules and norms

In the era of digital banking, cases of online fraud and unauthorized withdrawal of funds from bank accounts have become more frequent. Recently, an incident occurred in Greater Noida where millions of rupees disappeared from the accounts and fixed deposits (FDs) of one branch of Punjab National Bank (PNB), increasing concerns about the safety of depositors' funds.

If your accumulated funds are withdrawn without your knowledge, the question arises regarding compensation from the bank. The Reserve Bank of India (RBI) has established rules regarding client liability and the procedure for refunding funds in cases of unauthorized electronic banking transactions. If money is debited from your account without permission, you can minimize the damage by taking several immediate steps.

If a debit occurs from your bank account that you did not make, you must immediately notify the bank. This can be done using the bank's official customer support numbers, mobile application, website, or by visiting a branch.

There are three primary actions that should be taken:

File a complaint with the bank: You must inform the bank about the unauthorized transaction and register a complaint. If necessary, request the blocking of online debit and card operations to prevent further debits.
Save the complaint number: Be sure to obtain a reference number for the complaint from the bank. Also, save SMS messages, emails, bank statements, and transaction screenshots, as these documents will be needed for further investigation and fund recovery.
Report to cyber police: If the fraud is related to online payments or digital transactions, immediately file a complaint at the helpline number 1930. Additionally, a complaint can be filed through the Ministry of Home Affairs cybercrime portal at cybercrime.gov.in.

According to RBI rules, the client's liability in case of unauthorized electronic transactions depends on how the fraud occurred and how quickly the client notified the bank.

If the fraud was due to the bank's fault

If the unauthorized transaction resulted from negligence, error, or a systemic flaw on the part of the bank, the client's liability is zero. In such cases, the client does not need to prove the speed of filing the complaint; the bank bears all the loss.

In case of third-party fraud within 3 days

If the funds were debited due to interference by a third party or system hacking, and not due to the fault of either the bank or the client, the client must inform the bank about the transaction within three working days of receiving the information. If this condition is met, the client's liability will also be zero, and the bank will bear the entire loss.

What is the liability when reporting fraud after 4–7 days?

If the client reports the fraud to the bank within four to seven working days, their liability will be limited. This limit is determined by the type of account. The client may incur losses equal to the lesser of two amounts: the amount of the fraudulent operation or the established maximum limit. For Basic Savings Bank Deposit Accounts (BSBDA), the maximum liability is ₹5000, and for other regular savings accounts, it is ₹10000. For some current and other specified accounts, this limit can reach ₹25000.

What happens if OTP or PIN is shared?

If the fraud occurred due to the client's own carelessness, by sharing an OTP, PIN, password, or other payment information with someone, the client may bear the entire loss until they contact the bank. However, any additional unauthorized losses incurred after the bank receives the complaint will become the bank's responsibility.

What happens if more than 7 days pass?

If the client informs the bank about the fraud after seven working days, their liability will be determined according to the policy approved by the bank's board of directors. Therefore, the safest approach is to report the fund withdrawal immediately.

The RBI has set timeframes for refunds in cases of zero or limited liability. The bank is obligated to make a provisional credit of the unauthorized amount within 10 working days of receiving the complaint. This must happen regardless of the waiting period for insurance claim settlements. The amount must correspond to the value on the day of the debit.

The bank is given a maximum period of 90 days to fully investigate the complaint and determine the client's liability. If the bank cannot resolve the complaint or determine the liability within this period, it must pay compensation to the client in accordance with RBI rules.

Furthermore, the bank must ensure that the client does not suffer losses in the form of interest on savings or debit cards. No additional interest charges should be applied to the client's credit card.

If you have filed a complaint with the bank but it refuses to resolve your issue, you can approach the RBI's Complaint Management System (CMS) at https://cms.rbi.org.in. A complaint regarding banking services can be filed through the integrated RBI Ombudsman scheme.

Similar stories

www.aajtak.inOctober 23, 04:54

RBI Rules: What happens to expired Fixed Deposit (FD) terms after 10 years?

Fixed Deposit (FD) accounts are very popular among working people and ordinary investors due to the possibility of receiving guaranteed income with a low level of risk. However, sometimes people are unable to claim their funds after the term expires because they missed a bank notification or were unaware of this issue. The question arises: are the funds lost, or do interest payments continue?

According to the Reserve Bank of India (RBI) rules, the fate of the funds after the term ends depends on the instructions provided at the bank and the prevailing regulations. If the funds are not claimed within ten years, they may be transferred to the Depositor Education and Awareness Fund (DEA Fund).

When an FD term expires, the bank pays the depositor the amount according to the bank's policy conditions or extends the deposit with the depositor's consent. Usually, the following scenarios exist:

Automatic Renewal: If the automatic renewal option was selected when opening the FD, the bank may continue to place the deposit according to the current instructions and terms.

Transfer to Bank Account: If a payout upon maturity was specified, the bank sends the funds to the registered bank account according to its procedure.

Interest After Maturity: If the amount of the matured deposit is not paid out, interest may accrue on it at the savings account rate or the agreed-upon matured FD rate, whichever is lower. Thus, there is no guarantee of maintaining the old interest rate after FD maturity.

If no claims are made on the amount, or no activity occurs in the relevant account that would lead to settlement of the amount, within ten years from the FD maturity date, this deposit may fall into the category of unclaimed deposits. According to RBI rules, on the last working day of the month following the completion of the 10-year period, the bank calculates the remaining funds and transfers them to the Depositor Education and Awareness Fund (DEA Fund).

However, this does not mean your money is lost. RBI manages unclaimed amounts held in banks through this fund. The depositor or their legal heir retains the right to claim this amount. To receive the money, one must contact the relevant bank and go through the established procedure.

If the FD depositor passes away and the amount remains unclaimed, the heir or legal successor can apply to the bank. This may require a death certificate, identification documents, and other necessary papers, depending on the bank's requirements. After verifying the documents and the application, the bank makes the payment in accordance with current rules. Therefore, family members should keep information about their FDs, bank accounts, and designated heirs up to date.

If you do not need the funds in the near future, renewing the FD may be an option. Nevertheless, before making a decision, several points must be checked:

Compare Interest Rates: It is necessary to compare the current FD rates at the bank with the rate of your old FD, as a new FD may offer a lower or higher percentage.

Consider the Term: Choose an FD term that matches your needs. Before placing money for a long term, you should assess future expenses.

Check Early Withdrawal Penalties: Understand the terms regarding penalties or interest reductions upon early termination of the FD.

Maintain Fund Accessibility: If you might need the funds for urgent expenses or emergencies, you can consider distributing the entire amount between a savings account or several FDs with different terms instead of keeping all the money in a long-term FD.

Disclaimer: This article is intended only to provide general information. Rules regarding interest, payouts, and claims on FDs may vary depending on the bank's terms and the relevant program. Before taking any action, you must confirm the current rules with your bank.