BENGALURU: The Karnataka High Court asked banks to strive to make their online banking systems robust, leaving no room for fraudsters to gain control or easy access.
A division bench of Justice DK Singh and Justice TM Nadaf passed the order while dismissing the petition filed by the State Bank of India (SBI) challenging the order dated April 15, 2026, passed by the National Consumer Disputes Redressal Commission (NCDRC), which directed it to pay Rs 1.99 lakh to a customer, Pradosh Kumar Banerjee, 70, whose money was withdrawn fraudulently from his account in a bank at CV Raman Nagar branch in the city.
“The money involved in the banking sector is the public money, and the banks are accountable to the public, and any failure would not only affect the particular customer of the bank, but also the entire economy of the country and trust of the people with the bank”, the court observed.
The complainant is an SBI customer.
On July 19, 2022, he noticed that under an unauthorised transaction, a sum of Rs 1.99 lakh was debited from his account as well as a sum of Rs 25,000.
Within three hours, he emailed the bank about it. Immediately, he received a credit of Rs 25,000 but not Rs 1.99 lakh. He made several correspondences to the bank to recredit the amount, but it failed to concede to the request.
The complainant then approached the District Consumer Disputes Redressal Commission (DCDRC). The bank contended that the customer is responsible for sharing the OTP and it is not responsible for the negligence on the part of the customer; as such, there is no deficiency of service. The complainant firmly stated that he never shared any OTP.
Considering the arguments of the bank, the DCDRC dismissed the complaint. The complainant then filed an appeal before the Karnataka State Consumer Disputes Redressal Commission (KSCDRC) which allowed the same on the ground that there is deficiency of service and under the ‘zero liability clause’, and a circular issued by the Reserve Bank of India, is applicable to the case.
KSCDRC directed the bank to credit Rs 1.99 lakh to the account of the customer with Rs 25,000 as compensation. The bank filed an appeal before the NCDRC, which dismissed the same and held that the complainant is entitled to the reversal of the amount of Rs 1.99 lakh and a compensation of Rs 25,000, including the litigation expenses from the bank.
