‘Proceed with probe on whether bank owes money to cyber fraud victim’

In a cyber fraud case, the Calcutta High Court on Thursday directed the anti-bank fraud section to proceed with the investigation to determine whether the bank owes money to the victim under Clause 6 of the Reserve Bank of India circular on ‘Customer Protection Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.’

The intra-court appeal was made by the Punjab National Bank against the order by a Single Bench of Calcutta High Court which directed the bank to refund Rs 1,20,000 to the victim, who alleged that a cyber fraud was committed on him and the mentioned amount was siphoned off from his bank account.

According to the victim, on account of the third party breach, an unauthorised transaction had taken place and the same was reported within three days. The cyber fraud took place on June 28. He had lodged a complaint, the bank took cognisance of the same and further siphoning of money was prevented by the bank.

The report submitted by the state prima facie showed that the unknown fraudster induced the victim to download an app for changing the address of online delivery of some articles and to pay a negligible amount of Rs 5 and Rs 1 from two debit cards and then obtain a secret banking code and ultimately siphoned of Rs 1,20,000.

The bank placed reliance on Clause 7 of the circular issued by RBI. According to Clause 7 (i) of the circular: “In cases where the loss is due to negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorised transaction to the bank. Any loss occurring after the reporting of the unauthorised transaction shall be borne by the bank.”

Since the investigation by the anti-bank fraud section of detective department is going on, the Division Bench of Chief Justice TS Sivagnanam stated: “At this juncture, issuing a direction to the appellant bank to refund the amount of Rs 1,20,000 does not arise and writ petitioner has to abide by the outcome of the investigation done by local police as well as cyber cell.”

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