Supreme Court Holds SBI Liable to Refund Amount to Customer Who Reported Fraudulent Transaction
The Supreme Court recently ruled that banks must take responsibility for protecting customers from unauthorized transactions. In a case involving the State Bank of India (SBI), the Court upheld the bank’s liability for fraudulent transactions in a customer’s account.
The customer had been tricked into downloading a fraudulent app by a scammer posing as customer care, leading to unauthorized withdrawals of Rs. 94,204.80. SBI tried to deny responsibility, claiming the customer had shared sensitive information like OTPs is and M-PINs.
However, the customer denied sharing said information and argued that the fraud was due to a data breach on the retailer’s website. The Court agreed with the customer, noting that the fraud was reported within 24 hours and referred to the RBI guidelines which state that customers are not liable for unauthorized transactions caused by third-party breaches.
The Court also reminded customers to stay vigilant and avoid sharing OTPs and passwords with third parties. It concluded by this missing SBI’s appeal affirming the bank’s responsibility to refund the fraudulent amount.
Source: – Live Law
By: – Rajat Ranjan
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