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Bank of India Vs ATM Customers

If you are a Bank of India customer in India and have an ATM card, it is time to consider returning the ATM card to the Bank immediately since the Bank is exhibiting a noticeably dangerous anti customer stance related to Fraudulent ATM transactions.

Recently a customer of Bank of India in Bangalore, found that there were many unknown debits in his Savings Bank account. He complained to the branch. Branch told him that the disputed debits represent withdrawals made in an ATM of Canara Bank. Customer disputed the fact and showed the Bank that he is very much in possession of the card and he does not know how the disputed transactions arose.

Customer filed a complaint with the Police who not being able to undetstand the nature of the fraud have not progressed beyond registering an FIR. In the meantime the customer approached the Banking Ombudsman at Bangalore with his complaint.

The Bank has obtained a transaction report from Canara Bank about the ATM debits and informed the Banking Ombudsman that as per the statement of transactions it was the customerís ATM card that has been used for the withdrawal and there ends all discussions. Canara Bank stated that they did not have any CCTV footage of the withdrawal and the same was communicated to the Ombudsman who promptly closed the case and suggested the customer to approach other appropriate forums for redressal of his grievance.

In this case, though Canara Bank is also at fault, since it is an agent of Bank of India, the responsibility in this case falls on Bank of India. However Canara Bank through its negligence and Bank of India through its apathy are expecting the customer who is a senior citizen absorb the loss of Rs 40600/- which he had saved for his wifeís eye operation and was unable to access in time.

The Bank has now two options. One is to accept that the transactions were fraudulent in which case there is no reason why they should not bear the responsibility as there is clear indication that a cloned card was perhaps used in the transaction. Second is to refuse to admit that it is a fraudulent transaction and hold that only the customerís genuine card was used for the transactions. In such a case the Bank is implying that the Customer is telling a lie and trying to cheat the Bank.

While the Bank can make up its mind in this matter, What this incident indicates is that no customer having an ATM card is safe with Bank of India. It is possible that some fraudster who might have cloned your card by using a skimmer in one of the ATMs or obtaining the information in some other manner from the Bank or by tampering with the software of an ATM of any Bank can draw away your money.

Recently the Damodar Committee on Customer Service in Bank commissioned by RBI has stated that ďCustomers should be put on a Zero Liability protectionĒ in respect of ATM and Internet transactions and even when there is a dispute Bank should immediately make good the amount provisionally.

Unfortunately, Bank of India appears to be challenging the Reserve Bank of India in this respect and it is the turn of Reserve Bank of India now to assert its regulatory authority and ensure that its guidelines are followed.

In the meantime I would like to draw the attention of the Chairmen of Bank of India and Canara Bank and request them to provide their answers to the following.

1. Why did Canara Bank not have the CCTV in the particular ATM (Bommasandra-ATM D 08880058) when the RBI security guidelines and the Bankís own commitment under the Banking Codes and Standards Board of India Code 0f Customer Service provides that CCTV surveillance is required for ATMs?

2. When Bank of India authorises an ATM of another Bank like Canara Bank is it not the responsibility of Bank of India that its customerís security interests are protected and only secure ATMs are allowed to be used in such transactions?

3. If in this instance Canara Bank was at fault in not having CCTV surveillance, why did Bank of India failed to claim the loss from Canara Bank instead of refusing the customerís request for reversal of unauthorised transactions?

4. Does this not indicate that Bank of India and Canara Bank are in collusion with each other and maintaining a sub standard ATM payment system and making customers pay for their negligence?

5. Though Bank of India had admitted that the transactions were unauthorized and reversed one of the several transactions and Canara Bank had admitted that they were not maintaining CCTV in the particular ATM, how could the Banks persuade the Banking Ombudsman, Bangalore that neither of them were at fault?

5. How was Bank of India able to convince the Banking Ombudsman Bangalore that he should not provide a hearing to the complainant or organize a joint meeting for mediation as required under the Banking Ombudsman scheme but instead proceed to give his decision?

6. How was Bank of India able to convince the Banking Ombudsman Bangalore that he should reject the complaint under such ground as to deny him an opprotunity to appeal and also ensure that the Bankign Ombudsman would add that direction in his order itself?

7. How many more such ATM fraud incidents have been found in Bank of India to make it worthwhile for the Bank try challenging the customer in this case for a paltry Rs 40600/- and open itself to risks of being challenged under other forums where the issue of criminal liability of the Bank officials would also come up besides the civil liabilities?

8. Are both Bank of India and Canara Bank ready to be challenged by their shareholders on the long term consequences of running an insecure Banking platform and defending their inefficiency through litigation against its own customers?

9. Will Bank of India now make a disclosure to all its customers in which they

a) inform them that even when they are in physical posession of the ATM cards, it is possible for their accounts to be accessed unauthorisedly from ATMs of various Banks

b) inform them that they will be liable for all such transactions where the Bank finds that the unique number of the customerís credit card is reported by the ATM whether the customer owns the transaction or not.

c) warn them that if any Customer objects such debits he will be deemed to be making an attempt to cheat the Bank by himself withdrawing the money and claiming to be victim and appropriate legal action may be initiated against him.

d) seek the consent of the customers for such a disclosure or give them an option to return the ATM cards forthwith.

I hope I will be able to get answers to these questions from both the Banks.



August 13, 2011


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