 "Rs 63 lakh stolen from elderly couple's acct: Why SBI was fined Rs 97 lakh")
The National Consumer Disputes Redressal Commission (NCDRC) has upheld an order by the Telangana State Consumer Disputes Redressal Commission instructing the State Bank of India (SBI) to refund Rs 63.74 lakh to a customer. The lender was ordered to pay 9 per cent annual interest and an additional Rs 3.20 lakh as compensation and legal expenses (the cumulative amount SBI ordered to pay was Rs 97,06,491).
What is the case?
According to the NCDRC's order, an elderly couple opened a joint savings account and made three fixed deposits (FDs) totaling Rs 40 lakh on August 9, 2017. When they went to update their passbook on April 4, 2019, they discovered that only Rs 3 lakh remained in their account. A missing amount including Rs 40 lakh from the FDs (a total of Rs 63 lakh), had been withdrawn. The couple reported this to the branch manager, and an FIR was filed at the police station on April 9, 2019.
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What did SBI say?
Lawyers representing SBI stated that 37 transactions totaling Rs 63,74,536 took place in the elderly couple's bank account, which the couple says is’ unauthorised’.
The bank’s lawyers said that the ‘transaction rights’ were enabled by logging into https://www.onlinesbi.com on August 5, 2018, at 11:20 AM.
“It is the customer’s obligation to prevent unauthorised use of their mobile device and to avoid sharing the mobile banking password/PIN with unauthorised persons. They shared their mobile, PIN number and other details with their associates, and that all disputed transactions were conducted by these associates either in connivance with them or due to their negligence,” said lawyers representing SBI.
What did NCDRC say?
The NCDRC reiterated that the bank's failure to follow security protocols facilitated the fraud, stressing that better safeguards could have averted such incidents. Their ruling underscored the bank's significant responsibility to protect senior citizens, calling for stronger security measures to safeguard vulnerable customers.
NCDRC points out how SBI could have saved the elderly couple from fraud
AVM J Rajendra, presiding member of the NCDRC, in a detailed order, highlighted how the fraud could have been prevented if the bank had implemented updated security protocols:
Updated security protocol could have averted the fraud: Following this incident and after receiving necessary banking feedback, the bank revised its Internet Banking system, requiring customers to be physically present at the bank to activate Internet Banking services. This measure was introduced to protect customers who are not tech-savvy and are particularly vulnerable to exploitation. Had such safeguards been in place for the complainants, these unauthorised transactions might not have occurred. Unfortunately, by the time SBI implemented this procedural change, the complainants had already suffered the loss from the fraud.
A different mobile phone was used for the fraudulent transactions: The fraudulent transactions were carried out using a device not linked to the complainants' registered mobile number, as they did not own a smartphone. This fact was confirmed in the fraudster’s confession to the police, presented before the State Commission in the police remand report.