Business, Economy & Banking Current Affairs

RBI limits Customer liability in Online Banking

RBI has issued directions on ‘Customer Protection – Limiting Liability of Customers in unauthorised Electronic Banking Transactions’. RBI has issued the revised directions amidst a recent increase in customer grievances related to unauthorised transactions.

Salient Highlights

The following are the salient highlights of the revised directions:

If the customers report to the banks regarding the loss they suffer through online banking transactions within three days, then the amount involved will be credited to their accounts within a time period of 10 days. Any loss suffered by the customer after reporting of the unauthorised transaction will be borne by the concerned bank. In sum, there will be “zero liability of a customer” in the case of third party breach where the deficiency lies neither with the bank nor with the customer but elsewhere in the system.

The customer is required to report to the bank within three working days after receiving the communication from the bank regarding the unauthorised transaction.

In cases of customer reporting the third party fraud with a delay of four to seven working days, then the liability of customer in such cases would be up to Rs 25,000.

Customers will also be entitled to zero liability in cases when authorised transaction occurs due to contributory fraud/negligence/deficiency on the part of the bank irrespective of whether or not the unauthorised transaction has been reported by the customer.

In cases of negligence caused by the customer by sharing of payment credentials, the customer is liable to bear the entire loss until the unauthorised transaction is reported to the bank.

If the customer reports about the unauthorised transaction after seven days, then the liability of the customer would be determined as per the bank’s Board approved policy.

The bank has to credit the amount involved in the unauthorised electronic transaction to the customer’s account within 10 working days of reporting of fraud. The bank has to do this without waiting for settlement of insurance claim if any.

The banks should ask its customers to mandatorily register for SMS alerts and e-mail for email alerts for electronic banking transactions.

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BMI Research: India to have a GDP Growth of 6.9% in this Fiscal 

According to BMI Research, a Fitch group company, India is expected to register a growth of 6.9% in this financial year.

BMI Research was founded in 1984 by Business Monitor International and later in 2014, it was acquired by Fitch Group. The firm performs industry and financial market analysis in 24 industries and 200 global markets.

Salient Facts

The report has observed that the Real GDP growth has slowed to 6.1 % year-on-year in the fourth quarter of 2016-17. The growth rate is expected to pick up following the demonetisation drive in November 2016 but the weak public banks are expected to cap the economic recovery. The Public-Sector Banks are still plagued with mounting non-performing assets, which is expected to take a toll on India’s growth potential. Though the RBI has taken efforts to clean up the NPAs, the study observes that it will take some more time for credit allocation to the productive sectors of the economy.

The report, however, expects the economy to continue to recover in the coming quarters as the negative ramifications of the demonetisation measure have already started wearing off. India is also expected to get benefits from positive demographic trends, greater external stability arising out of improved terms of trade from low oil prices, and continued reforms improving the business environment of the country.

Asia 

The report expects a slowdown in economic growth in North Asia in 2017 and 2018. The slowdown will be driven by the structural slowdown in China, poor policy initiatives in Japan, and policy uncertainty in South Korea.

In Asia, India and ASEAN are likely to remain as the bright spots in the region owing to their positive demographics and improvements in the business environments.

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