Lok Sabha Question No. 2810 (UNSTARRED), answered on 2018-12-28
Subject: Money Siphoned off from Bank Accounts
Ministry: FINANCE
Asked by: S.P. MUDDAHANUMEGOWDA, B.V. NAYAK

## GOVERNMENT  OF INDIA

## LOK SABHA

## MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## UNSTARRED QUESTION NO. 2810

## TO BE ANSWERED ON THE 28 TH  DECEMBER 2018/ PAUSHA  7, 1940  (SAKA)

Money Siphoned off from  Bank Accounts

## 2810.   SHRI S.P. MUDDAHANUME   GOWDA: SHRI  B.V. NAIK:

Will  the Minister  of FINANCE  be pleased to state:

- (a) the number  of complaints  of bank  frauds received  where  money  was siphoned  out in the name of linking  Aadhaar  with  PAN/Bank  Account/SIM  card, during  the last four years,  bank  and year-wise;
- (b) whether   any   directives   have  been  issued  to  banks   to  deal  with   such  instances   of bank fraud,  if so, the details  thereof  and if not,  the reasons therefor;
- (c) whether  a Grievance  Redressal  Mechanism  has been put in place to deal with  such instances;  and
- (d) if so, the details  thereof  and if not,  the reasons  therefor?

## ANSWER Minister of State in the Ministry  of Finance

## (SHRI SHIV PRATAP  SHUKLA)

- (a):  Reserve   Bank of  India  (RBI)  has  apprised   that   the  required   information is  not available with it. RBI has further informed that while it has received few complaints/reports on incidents  of bank  frauds where  money  was siphoned  fraudulently using Aadhaar  details,  data of such complaints  is not maintained  and its Central  Frauds Monitoring  Cell  does not have data on frauds in such category.
- (b)  to  (d):  RBI  has  issued  Master   Direction   on  Frauds   -  Classification and  Reporting, with  a view  to providing  a framework  to scheduled  commercial  banks  and select financial institutions, to  detect  and  report   frauds  early,   report   to  the  investigative   agencies, examine   staff  accountability  and  do  effective   fraud   risk   management   in  respect   of banking  transactions  in general.

RBI has further  apprised  that  it has issued guidelines  on Customer  Protection  - Limiting Liability of Customers  in Unauthorised Electronic  Banking  Transactions  for determining the customer  liability which  include, inter alia , the following:

- (1) Where  customer's  own  involvement  is established,  customer  will  be liable.
- (2) Customer  will  not be liable-
3. (i) Where  fraud/negligence  is on the part  of the bank;
4. (ii)  Third-party breach   where   the  customer   notifies   the  bank   within   three working days of receiving communication   from  the  bank   regarding unauthorised  transaction
- (3) Where   customer's   own   involvement   is  not  clearly   established,   customer   liability will   be  limited   to  a  maximum   of  Rs.  5,000/-  if  he  reports   within   four   to  seven working  days.
- (4) If  customer   reports   beyond   seven  working   days,   customer   liability will   be determined  based on bank's  Board-approved  policy

Pursuant   to  a  decision   made  by   the  Government   of  India  to  enable  resolution   of complaints   of  customers   of  banks   relating to  certain   services   rendered   by   the  banks, Banking   Ombudsman   has  been  established   as  a  quasi-judicial   authority. Complaints regarding   banking   services   can  be  made  to  the  Banking   Ombudsman,   a  senior   official appointed  by  RBI. Complaint  can be filed before the Banking  Ombudsman  if reply  is not received  from the bank  within  one month  of representing  to it,  or the bank  rejects  the complaint,  or if the complainant  is not satisfied  with  the reply  given  by  the bank.  The Banking   Ombudsman   may   award   compensation   for  any   loss  suffered,   limited   to  the amount  arising  directly  out of the act or omission  of the bank  or Rs. 20 lakh,  whichever  is lower.  He may  also award  compensation  not exceeding  Rs. 1 lakh  in case of complaints relating   to  credit   card  operations,   for  mental   agony   and  harassment.   Complaints may relate, inter alia, to the following:

- (i) no-payment  or delay  in payment  of inward  remittances;
- (iii) delays,  non-credit  of proceeds  to party's  accounts,  or non-payment  of deposit;
- (ii) failure  to provide,  or delay  in,  providing a  banking  facility  promised;
- (iv)levying  of charges  without adequate prior  notice  to the customers;  and
- (v) any  matter  relating  to the violation  of directives  issued by  RBI in relation  to banking  or other  services.

Further,   RBI  guidelines   for  issuance   of  Prepaid   Payment   Instruments   (PPIs)  including digital  wallets,  require  PPI issuers to put in place an effective  mechanism  for redress of customer  complaints,  publicise  the same for the benefit  of customers,  and report  data in respect of customer  complaints  to RBI. Also,  as per RBI's guidelines  on mobile  banking, banks are required  to set up a help desk,  disclose on website  its details  and the escalation procedure  for lodging  complaints,  and make  available  these details  to the customer.