Delhi HC Holds SBI Accountable For Rs 2.6 Lakh Cyber Fraud, Orders Refund & Compensation To Customer
The Delhi high court directed SBI to pay 9% annual interest on Rs 2.6 lakh and a compensation of Rs 25,000 for the customer's distress.
The Delhi High Court has ordered the State Bank of India (SBI) to reimburse Rs 2.6 lakh that was stolen from the account of a 55-year-old man in a cyber fraud incident three years ago. In addition to this, the court directed the bank to pay 9% annual interest on the amount and a compensation of Rs 25,000 for the petitioner’s distress.
The judgment, delivered by Justice Dharmesh Sharma, found SBI guilty of “clear service deficiency" for its delayed and negligent response to the fraud. Despite being alerted to the fraudulent withdrawals, SBI failed to act promptly and adequately, which the court described as “lax, faulty, and not timely." Justice Sharma stressed that banks must prioritise the security of their customers, responding swiftly and efficiently whenever fraud is detected.
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The case dates back to 2021 when the petitioner fell victim to a phishing and vishing scam. He received a fraudulent link on his mobile phone, warning him that his SMS service would be shut down. Upon clicking the link, two large sums – Rs 1 lakh and Rs 1.6 lakh – were withdrawn from his account. The petitioner insisted that he had not shared any One-Time Password (OTP) with the fraudsters, yet the funds were transferred without his knowledge or consent.
Upon discovering the unauthorised withdrawals, the petitioner immediately notified SBI. However, the bank’s reaction was far from satisfactory. The court noted that SBI failed to take prompt action, such as initiating a chargeback, attempting to recover the funds, or freezing the suspicious accounts.
Justice Sharma specifically criticised SBI for not taking any preventive measures even when it became clear that the fraudsters had links to other banks, including IDFC Bank and One97 Communications. The court pointed out that the bank’s failure to act swiftly and decisively exemplified a serious lack of customer service, especially in cases involving fraud.
The court highlighted the crucial role of effective customer service, especially when a fraud has been committed. It found the attitude of SBI to be “seriously unsatisfactory," holding the bank accountable for what it termed a “serious service deficiency."
By holding SBI responsible for its failure to act quickly, the Delhi High Court has set a precedent that banks must adopt a more proactive and responsible approach in handling fraud cases, protecting both their customers and their reputation.
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