ZERO LIABILITY AND LIMITED LIABILITY
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ZERO LIABILITY AND LIMITED LIABILITY
Hi Bankersdaily Aspirant
” You don’t want a million answers as much as you want a few forever questions.
The questions are diamonds you hold in the light. Study a lifetime
and you see different colors from the same jewel”
Aspirant,today we are going to post an article about “Zero Liability and Limited Liability”.Frauds in online transaction are growing day by day,with this increased fraudulent activity RBI has introduced “Zero Liability and Limited Liability” . This Article helps you not only to score in the exam it also helps in day to day life.
ONUS TO BANK BY RBI:
With increased digital market and increased online transaction,nowadays there is lot of frauds in online Transaction. To Reduce this Frauds in Online Transaction RBI announced the bank to merge their Phone Number with the Bank Account and there by if any transaction has taken place in the Account then the customer will be intimated with the Alert Message via SMS or else with EMail.
ZERO LIABILITY:
The term Zero Liability refers that,When a Customer lost their money due to frauds in online transaction,then their money is returned back if it is found that the Customer is innosent
- Contributory fraud on the part of the bank
- Third party breach which happens due to system fault or where the deficiency lies neither by bank or with the customer, there is Zero Liability when the customer notifies the bank with in three working days
LIMITED LIABILITY:
A Customer shall be liable for the loss occuring due to unauthorised transactions in the following cases,
- Loss happened when the customer share their password,customer is responsible for the whole loss
For example, if the customer has himself provided ATM pin or online banking passwords to another person, and then a fraud happens, then it shall be the full responsibility of the customer to bear the losses until he/she informs the bank.
The liability vary according to the account:
| Type of Account | Maximum liability
|
| • BSBD Accounts | 5,000 |
| • All other SB accounts • Pre-paid Payment Instruments and Gift Cards • Current/ Cash Credit/ Overdraft Accounts of MSMEs • Current Accounts/ Cash Credit/ Overdraft Accounts of Individuals with annual average balance (during 365 days preceding the incidence of fraud)/ limit up to Rs.25 lakh • Credit cards with limit up to Rs.5 lakh |
10,000 |
| • All other Current/ Cash Credit/ Overdraft Accounts • Credit cards with limit above Rs.5 lakh |
25,000 |
Liability vary depending on the time taken by the customer to report about the fraudulent action to the bank:
| Time taken to report the fraudulent transaction from the date of receiving the communication | Customer’s liability |
| Within 3 working days | Zero liability |
| Within 4 to 7 working days | The transaction value or the amount depends on the Account type |
| Beyond 7 working days | As per bank’s Board approved policy |
RBI has amended this due to increased online frauds and recent rise in customer grievances relating to unauthorised transactions resulting in debits to their accounts/cards as well as to protect customers from large financial losses on account of such frauds, the RBI has come out with revised guidelines aimed at limiting customer liability in fraudulent transactions.
Follow our post Regularly to get updated about recent trends in banking sector to score in upcoming exam
Questions which may be asked from the above article:
1. When the Customer is given Zero Liability?
2.Whether a person is given any liability if he/she is responsible?
