Rs 1 Crore lost by executive in Mumbai Bank fraud

In one of the larger Bank frauds of recent times, an executive in Mumbai has lost Rs 1 crore through a series of fraudulent transactions in his Bank account. The transactions occurred through 12 RTGS debits within a space of 45 minutes indicating a total failure of the Bank’s security warning system.

The Bank involved is Yes Bank.

As it always happens the victim is now running around the Police where as it is the Bank which should run around the Police. The victim is entitled to be fully reimbursed of his losses by the Bank immediately and it is the Bank which has to file a police complaint and pursue its recovery.

Details  in TOI

It must be pointed out that the Damodaran Committee on Customer Services set up by RBI had recommended that Customers should be provided complete control on fixing daily limits on such transactions as well as a freedom to switch on and off the Internet banking facility. It had also clearly defined the bank’s liabilities in such cases and the need to immediately reimburse the losses to the customers.

Unfortunately, powerful Bankers such as SBI and ICICI Bank have used their influence in the Indian Banking Association and prevented RBI from implementing the recommendations of the Damodaran Committee.

RBI has not shown the courage to ignore the objections of IBA and go ahead with the Damodaran Committee recommendations.

If therefore this case is taken to a  Court, I would advise IBA to be made a party to the suit along with RBI.

Naavi

Naavi

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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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