General Studies · RBI Customer Liability Guidelines
Mr. Rajesh, a retail customer, notices three unauthorized transactions on his credit card totaling ₹1,50,000 on the night of August 1st. He immediately tries to call the bank's 24/7 helpline but cannot get through due to technical issues. He finally manages to report the fraud and block the card on the morning of August 4th. The bank conducts an investigation and finds that the transactions were done using a cloned card and did not require an OTP (International transaction). The bank refuses to waive the liability, stating that Rajesh reported the incident more than 72 hours after the transactions occurred, and therefore, as per their internal policy, he is liable for the full amount. Applying the RBI's 'Customer Liability' guidelines, which of the following is the correct legal position?
- 1Rajesh is 100 percent liable because international transactions do not require OTP as per global standards.
- 2Because Rajesh reported the fraud within 4 to 7 working days, his liability is capped at a maximum of ₹25,000 as per the RBI's tiered liability structure.
- 3Since the delay in reporting was due to the bank's own technical failure and the fraud occurred due to a system-level vulnerability (cloning), Rajesh has 'Zero Liability' regardless of the reporting time.✓
- 4Rajesh is liable for the full ₹1,50,000 because he failed to report the transaction within 1 hour as per the bank's terms and conditions.
Correct answer
Since the delay in reporting was due to the bank's own technical failure and the fraud occurred due to a system-level vulnerability (cloning), Rajesh has 'Zero Liability' regardless of the reporting time.
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