UCO Bank glitch: Dos and don'ts for banks and customers
UCO Bank received a pleasant surprise earlier this month when a technical glitch resulted in the bank erroneously transferring a total of Rs 820 crore through the mobile-based Immediate Payment Service (IMPS) system to their accounts. The bank managed to recover most of the money, but it has raised serious concerns about account safety and what can customers do in case of such fraudulent or erroneous debits or credits.
Which are the electronic transactions vulnerable to fraud?
The Reserve Bank of India classifies electronic transactions into two broad categories: online transactions (internet banking, mobile banking and prepaid) and face-to-face transactions (needing a physical payment instrument such as a card or mobile phone at an ATM or a point-of-sale terminal).
Banks have been directed to set up systems and procedures to ensure the safety and security of electronic banking and ensure a robust fraud detection and prevention mechanism.
What has the RBI directed banks?
Banks must assess any gaps in their systems which could result in unauthorised transactions and measure the possible liabilities arising out of them and take steps to mitigate risks and protect themselves against such liabilities. Banks also have to continually and repeatedly advise customers on how to protect themselves from electronic banking and payments-related fraud.
They must also ask customers to mandatorily register for SMS alerts.
What facilities must banks provide for reporting fraud?
Banks must provide customers with facilities of a website, phone banking, SMS, email, IVR and a dedicated toll-free helpline for reporting unauthorised transactions as well as loss/theft of payment instruments such as cards. They should also be given the
