It is reported that Axis Bank has agreed to refund the losses suffered by its customers in Mumbai who had lost about Rs 37 lakhs through the ATM card cloning fraud. It is good that Axis Bank has decided to admit its liability rather than fighting a legal battle with the customers.
Perhaps the fact that the customers were members of Police influenced the decision of the Bank. Also since the withdrawals were made abroad, made it difficult for the Bank to blame its customers for causing the fraud.
Further the stand which Axis Bank has adopted in a Phishing case in Bangalore left little legal option for the Bank to pursue any other option. The reason is that in this case against a corporate customer in Bangalore, Axis Bank has argued that ITA 2008 provisions regarding Hacking is not applicable to any crime against a Corporate entity such as itself.
The Bank by adopting this stand stands committed to abdicating the protection available in ITA 2008 for any crimes committed against Axis Bank.
I wish the shareholders of Axis Bank question their management on this voluntary abdication of its rights under ITA 2008 and how it has affected its operational risk profile under Basel II/III.