Panchkula: Failing to prevent fraud costs bank dear

Holding PNB guilty of negligence and deficiency in services, the District Consumer Disputes Redressal Commission directed the bank to pay the complainant ₹11 lakh that were fraudulently withdrawn from his account, along with 9% interest , and ₹5,500 as cost of litigation

For failing to “put in place a robust and dynamic fraud detection and prevention mechanism as directed by the RBI”, the District Consumer Disputes Redressal Commission, Panchkula, has directed the Punjab National Bank (PNB) to pay a compensation of ₹15,000 to a Dhakoli resident.

Dhakoli resident Harish Gulati received a link and ₹9 lakh were withdrawn from his account through three fraudulent transactions. (Shutterstock)

Holding PNB guilty of negligence and deficiency in services, the commission also directed the bank to pay the complainant ₹11 lakh that were fraudulently withdrawn from his account, along with 9% interest. The bank will also pay ₹5,500 as cost of litigation to the complainant, Harish Gulati, 52, of Dhakoli, Zirakpur.

Gulati had submitted that on March 30, 2021, he had looked up the toll free number of PNB on Google to check his account balance. Thereafter, he received a link and ₹9 lakh were withdrawn from his account through three fraudulent transactions.

When he called the toll free number to freeze his account, he was assured that no further transaction will be made. But after a few minutes, another ₹2 lakh were withdrawn from his account. Gulati alleged that the fraudsters succeeded in uploading the fake toll free number as well as malicious link on Google due to the lapses and negligence on the bank’s part.

No one appeared on behalf of the bank, so they were proceeded against ex parte.

RBI directives ignored

The detailed order said considering the recent surge in unauthorised transactions in bank accounts, the RBI had issued a circular on July 6, 2017, directing all banks to put in place appropriate systems and procedures to ensure security of electronic banking transactions; robust and dynamic fraud detection and prevention mechanism; mechanism to assess the risks resulting from unauthorised transactions and measure the liabilities arising out of such events.

“The banks cannot be absolved of their basic duty towards their customers to conclude an in-depth inquiry, so as to ascertain the identity and whereabouts of the fraudster involved in the unauthorised transactions,” opined the commission.