Fraudulent withdrawals from banks doubled to Rs 109.56 cr: FinMin

Chennai: The value of fraudulent withdrawals from banks more than doubled even as the number such withdrawals declined in FY17-18, Finance Minister Piyush Goyal said.

Replying to a question in the Rajya Sabha, the Finance Minister said the value of fraudulent withdrawals doubled to Rs 109.56 crore.

“As per information furnished by Reserve Bank of India (RBI), with the proliferation of information technology (IT) and usage of related services, there has been an increase in the absolute number of complaints of withdrawing money illegally from bank accounts,” Piyush Goyal said.

“As per RBI, the amount of automatic teller machine (ATM) or debit card, credit card and internet banking frauds of Rs 1 Lakh and above, reported by scheduled commercial banks and select financial institutions (FIs) during 2015-16, 2016-17 and 2017-18 are Rs 40.20 crore, Rs 42.29 crore and Rs 109.56 crore, respectively,” Goyal added.

Asked whether it is also a fact that the amount withdrawn illegally by cyber criminals from the accounts has to be borne by the account holders only and not by the banks, the Minister replied in negative.

Goyal cited a circular issued by RBI on 6 July 2017 on limiting liability of customers in unauthorised electronic banking transactions. This circular was issued by the central bank following a persistent battle by Moneylife Foundation.

Making banks responsible to prove liability of the customer in such cases, in the circular, RBI says, in case of contributory fraud or negligence or deficiency from the bank, the customer will have zero liability irrespective of whether or not s/he reports the unauthorised transaction.

In case of third party breach, where there is no liability on bank or the customer, and the customer reports it to the bank within three days, then also she is entitled to zero liability, the Reserve Bank says.

There was also a question raised that targetted the number of lapses of cyber security which happened due to carelessness by banks. However, the Minister said, the central bank did not maintain this information.

NT Bureau