Axis Bank ATM license should be cancelled by RBI

Axis Bank has been in the news for the wrong reasons in recent days involving one kind of Cyber Fraud or the other. There have been many Phishing frauds and KYC failure reports as well as organized money laundering in the Bank. The Bank has been defending itself in Courts by effectively manipulating the law to delay justice to the genuine customers. RBI has so far been mild in reprimanding the Bank. It has only resorted to imposing fines for KYC failures and not resorted to more drastic measures such as cancellation of some branch licenses where KYC failures were observed as a part of a systematic procedure to boost branch business.

This mild reprimand by RBI has enabled the Bank to continue its “Negligent Banking”

Way back in 2011, there was a report in Hindu Business Line where it was suspected that Axis Bank ATM software could have been hacked. (See report here). The more recent incident in Mumbai where 29 customers have found that their ATM cards have been cloned and used abroad for withdrawing around Rs 13 lakhs in cash (See report here) shows that Axis Bank continues to practice “Negligent Banking” and  makes depositor’s money vulnerable to frauds.

Today’s Economic Times reports yet another ATM fraud of Rs 80000/- from Gurgaon in which another Axis Bank ATM is involved. In this case involvement of local frauds loitering in the ATM centers were involved.

In all these cases there is a clear indication that Axis Bank has failed to maintain a reasonable level of security at its ATMs which has caused the losses. It is therefore time for RBI to revisit its ATM security instructions and if it is found that Axis Bank has been systematically neglecting the security at its ATMs, RBI should consider suspending or cancelling the ATM licenses of Axis Bank.

In one of the news paper reports it is mentioned that Axis Bank would pay the victims from “Insurance”. Axis Bank resorts to such settlement selectively when the victims are celebrities. In the instant case the victims are Policemen whose assistance is perhaps required by Axis Bank to support its other not so legal activities. But when it comes to other common customers, Axis Bank is known to try all its tactics to twist the law to harass the customers until they agree to bear the loss of fraud caused by the Bank’s negligence.

RBI needs to examine the fraud reporting and management practices of Axis Bank,check if RBI’s Cyber fraud guidelines are being followed  and take steps to tighten the security against frauds.


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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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2 Responses to Axis Bank ATM license should be cancelled by RBI

  1. Sharad Upadhyay says:


    Recently I tried withdrawing Rs. 2000 using my IDBI Debit card from an AXIS BANK ATM based at Sahara Mall, Gurgaon. The ATM asked me if I want a receipt for the transaction. I opted yes, the transaction was automatically aborted. Wondering what happened to the ATM, I tried again and again (with option “Yes” for transaction receipt) – a total of 5 times, but encountered the same problem everytime.

    Meanwhile I noticed that another person who opted “No” for printed receipt was able to withdraw money from the same machine. I followed him – went ahead for withdrawal without transaction receipt, and this time machine dispensed the desired amount i.e. Rs. 2000.

    Next day I noticed that my IDBI account was debited twice: first for a sum of Rs. 10000, and once again for Rs. 2000 (which I actually withdrew there). I was wondering what made the ATM cause a debit of Rs. 10000 in a single go – while I never entered this amount at ATM console.

    I raised an official complaint with my bank (IDBI), and they escalated the case on my behalf with Axis Bank, however, Axis Bank rejected my claim – stating that their ATM balancing reports, switch files, and other transaction logs show that Rs. 10000 transaction was carried out successfully, and they do not owe me anything.

    At this stage my bank i.e. IDBI has been helpless, and I’m just wondering whom to report this fraudster in order to get my money back. It appears that something fishy is going on there in Axis Bank ATMs with help of CMS (the agency which replenishes cash in ATMs) and the Axis Bank staff itself. How is it possible that there was no surplus sum recovered from ATM for my failed transactions, and how is it possible that an ATM automatically converts 5 subsequent transactions of Rs. 2000 each in to a single transaction of Rs. 10000?

    Please let me know what can be done in this case, and how can I get my money back. Also, isn’t there any authority to punish the bank owning such malicious ATMs and ripping off the customers like this?

  2. bhatt says:

    Well, the attitude of banks in not implementing proper security measures is hitting customers hard. In my town, one such incident took place and this time with Union Bank of India. The victim is my friends cousin.
    The bank straightaway shaking its hands off the incident.
    And RBI is proving to be ‘a teacher who doesnt teach nor punish‘ in such increasing cases of frauds by banks itself.
    Even so-called private ‘big banks’ are siphoning off money – ‘the salami attack style’ from my account in name of ‘Minimum account Balance charge’ even if i have sufficient balance in my account.
    And after having a spat with the banks sophisticated thieves i get my money back with a polite ‘sorry for inconvenience’ sort of nonsense.
    its like we can here never trust any banks. They have the same DNA- Cheat customers.

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