With the Reserve Bank of India introducing zero liability and limited liability concept, now the customer will not suffer any loss if unauthorised online banking transactions are reported within three days and the amount involved will be credited in the accounts concerned within 10-days.
The RBI has also asked its banks to make its customers to register themselves to the text message alerts and permit reporting of for electronic banking transactions through a reply to the alert message.
The draft proposal to limit customer liability in a fraudulent transaction was floated in August 2016. But now the RBI has come out with final guidelines.
A customer's zero liability will also arise in case of third party breach where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system.
If the fraud is reported after seven days, the customer liability will be determined as per the bank's Board approved policy. However, the maximum liability of a savings bank account customer will be Rs 10,000 in such cases.
Whereas, in case of where the loss is due to negligence by the account holder, the customer will bear the entire loss until the unauthorised transaction is reported to the bank.