Naavi.org recently was informed of a bizarre instance involving Axis bank and ATM transactions. This incident is a matter of serious concern to all Axis Bank customers and hence we would like to bring this to the notice of all including Reserve Bank of India.
I am reproducing verbatim a comment posted by one Mr Sharad Updhyay about his experience in an ATM in Gurgaon for one of our earlier articles titled “Axis Bank ATM license should be cancelled by RBI“
“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?”
First comment I would like to make on this incident is that there is apparent fraudulent mis-management by Axis Bank. It is clear that the ATM has been deliberately tweaked to ensure that fraudulent transactions donot come to the notice of the customer when he is withdrawing the amount.
The responsibility for this fraud lies squarely on the management of Axis Bank all the way up to the Chair person.
The reported incident is a report of possible hacking of a critical computer resource belonging to the Banking system. It represents a cognizable offence under ITA 2008. Mumbai police who closely monitor even facebook “likes” and go the extent of arresting persons, must be considered as being aware of the occurrence of this crime. They should therefore take suomotu action and register a Cyber Crime under Section 66 of ITA 2008 making unknown Axis Bank employees as suspects. It should also investigate “Negligence” from Axis bank ATM division and the Chair person for not taking adequate information security measures to protect the ATM transactions.
The Reserve Bank of India at the same time initiate its own investigation and take penal action against the officials of the Bank.
Now coming back to the customer and what he can do.
1. Normally money fraudulently debited to the account should have been reversed immediately on filing of a complaint with the Bank.
2. IDBI Bank cannot absolve itself of its responsibility since they have used Axis Bank as it’s agent and hence they are responsible for their client’s loss.
3. Customer need not go to the Banking Ombudsman since that is a sham run by RBI and most Ombudsman are biased in favour of the banks and simply reject the claim with a further proviso that you cannot appeal to RBI.
RBI is aware that the scheme is a sham and yet has not shown any interest in correcting the same. This is not a reflection on the Banking Ombudsman in Mumbai but a general reflection on the scheme and how it is run.
If possible I advise the customer to personally meet Mr Raghuraman Rajan, the Governor of RBI and check why he is not considering himself responsible for running a secure banking system.
4.The customer is fortunate to be in Mumbai where the IT Secretary is one Mr Rajesh Aggarwal. He is also the “Adjudicator” under ITA 2008. For any financial loss arising due to contravention of any of the provisions of ITA 2008, in Mumbai, he is the sole authority having judicial powers to conduct an enquiry and award a compensation.
I advise the customer to make an adjudication complaint to him immediately. If he remains in office for some more time, he will definitely give him justice.
However, since Maharashtra is likely to have a change of Government soon and it is customary to shuffle secretaries if a new Government comes, it is possible that this great officer who is upholding justice under ITA 2008 like no other IT Secretary in India may be shifted out. Hence the customer should at least get his complaint registered before any such change occurs.
5. It would also be better if a complaint is filed with the commissioner of Police, Mumbai against the officials of IDBI Bank and Axis Bank for running a fraudulent ATM system and causing loss to you. The customer should not fall into the trap of filing the complaint against the unknown fraudster who might have drawn the money. That person will never be traced since IDBI bank is unlikely to have maintained the CCTV footage or other evidence that may be required for this purpose. Police and Banks will try to hold that only that unknown person is responsible and no body in the Bank is responsible. This is a way of driving the complaint to a dead end. For the customer it is always a transaction with the Bank and hence should hold the Bank alone responsible.
The Police complaint should also mention that RBI has been negligent in enforcing ATM security and is also responsible for pushing customers to such frauds.
If necessary, the customer may take the assistance of a Consumer activist to pursue the complaint.
It may appear that the money lost may not be substantial and hence may not be worthy of the trouble of complaining. It is this attitude of most of us that emboldens criminals to resort to this type of small ticket frauds which we refer to as “Salami” attacks. It is our duty to bring this to public knowledge and wake up regulators like RBI to remind them of their responsibilities.
In the meantime, I demand that Axis Bank makes an official statement about this incident.