Consumer court asks 'negligent' State Bank of India to refund Rs 5.88 lakh to complainant

NAGPUR: Holding the State Bank of India (SBI) ‘negligent’ in protecting the complainant’s money, the Consumer Disputes Redressal Commission in Wardha has directed the bank to refund Rs5.88 lakh to the customer.

The court also slapped Rs50,000 fine on the banking behemoth to be paid to the complainant, which includes Rs30,000 towards physical and mental harassment, and Rs20,000 for litigation costs.

“The bank miserably failed to implement the guidelines issued by the Reserve Bank of India (RBI). The entire transaction pattern also establishes that the bank’s dynamic check velocity mechanism would have easily detected the unusual transaction of high-volume denomination. However, it did not install the detection mechanism. By not providing such a mechanism for checking proper velocity, the bank has committed deficiency in service,” a bench comprising members PR Patil and Manjushri Khanake ruled.

The judges held that it was the bank’s duty to verify the truthfulness of the transactions. “It should have sought consent for the transfer of money, but it did not take care and acted negligently, which causes losses to the complainant,” they said.

The complainant, a retired Indian Army personnel from Ashti in Wardha, had received a call from an unknown mobile number on March 18, 2021, asking him to recharge his mobile plan. The caller asked him to install a remote software. After installing the software, he received an OTP which he did not share with anyone, still an amount of Rs5 lakh and Rs88,000 were withdrawn from his account in just 10 minutes.

On receiving an SMS about deduction of money, he immediately rushed to SBI branch at Ashti, explained the incident and requested for blocking his account. He filed an FIR at Ashti police station the next day.

After failing to get any response from the bank and police, complainant Satish Lawhale, through counsel Mahendra Limaye, approached the consumer court for a refund of his amount.

Responding to the notice, SBI said it was wrongly dragged into the case, as the transactions took place between the complainant and fraudsters, and it had provided all information about where the amount was transferred. Passing the buck to the 61-year-old complainant, saying he failed to check whether the call was spam or fake or not, the bank said he installed the software that led to transfer of OTP to the fraudsters.

Lawhale also added Bangalore-based Novopay Solutions, a domestic money transfer platform, as another respondent in the complaint, since the amount was transferred from SBI to its account and later to fraudsters through 116 transactions in multiple accounts in just two hours. Novopay too held the complainant solely responsible for the loss while accusing him of making baseless allegations against them.

The complainant contended that for adding beneficiary it takes a minimum of four hours and also RBI has made it mandatory to verify KYC of all customers before transferring the amount. Still the bank has failed to take safety measures and transferred the entire amount in just ten minutes.

Relying on various judgements, Limaye said it was not negligence of the complainant but it was a ‘digital accident’ and there is an in-built duty of care cast on banks to monitor customers transactions and block the same if deviation is observed in normal pattern.

WHAT CONSUMER COURT SAID

* SBI & Bangalore-based Novopay Solutions miserably failed to implement RBI guidelines

* Dynamic check velocity mechanism would have easily detected unusual transaction of high-volume denomination

* It failed to install detection mechanism, committed deficiency

* Bank’s duty to verify truthfulness of transactions

* Bank should have sought consent for transfer of money, but it acted negligently causing losses to complainant