Bank Must Refund Fraudulent Withdrawal if Customer Not at Fault: NCDRC
NCDRC has held banks liable for unauthorised digital fraud withdrawals, directing refunds within 10 days if no customer negligence is found
Udaipur, Jan 14, 2026 – In a significant ruling that will go a long way in strengthening consumer rights, the National Consumer Disputes Redressal Commission (NCDRC) has ruled that if money is fraudulently withdrawn from a customer’s account without any fault or negligence on the part of the account holder, then the bank must refund the amount within 10 days.
Clarifying the provisions of the Reserve Bank of India’s 2017 circular involving customer liability in cases of digital and electronic banking fraud, the apex consumer commission delivered this verdict while dismissing a bank’s appeal against a decision of the State Consumer Disputes Redressal Commission.
The consumer body said that if unauthorised transactions occur for no fault of the customer, and there is no proof of sensitive information such as OTPs being shared, then the bank must be held financially liable.
A Bench comprising NCDRC president Justice AP Sahi and Member Bharat Kumar Pandya ruled in favour of a woman account holder from Bengaluru, holding the bank liable for the unauthorised withdrawal.
Source: Media Reports
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