Who is Liable for Digital Fraud? Your Legal Rights Explained | Advocate Prakhar Gupta

Many victims believe that once money is gone, it is lost forever. However, as an Advocate in Kota, I want to highlight the RBI Circular dated July 6, 2017, which protects consumers. It establishes a "Burden of Proof" that lies squarely on the bank, not the customer.


The 3-Day Rule (Zero Liability)

If you report a third-party breach (where neither you nor the bank is at fault) within 3 business days, your liability is ZERO. The bank is mandated to credit the "shadow- reversed" amount back to your account within 10 working days. Provided : 
  1. The fraud occurred due to bank negligence.
  2. A third-party breach occurred, and you reported it to the bank within 3 business days.

The 4-to-7 Day Window (Limited Liability)

If you are negligent (e.g., sharing your OTP), you are liable for the loss until you report it. If you report it within 4 to 7 working days, your liability is limited to a pre-determined amount (often ₹5,000 to ₹25,000 depending on account type).

Case Study: 

HDFC Bank Ltd. v. Jesna Jose (NCDRC) The Commission held that the bank is liable for unauthorized electronic transactions if the account holder is not at fault. This sets a vital precedent for victims seeking justice through a Lawyer in Kota.

Advocate Prakhar Gupta | Advocate in Kota | Lawyer in Kota | Lawfirm in Kota

Legal Disclaimer: 

The information provided in this article (and any related content) is for general educational and informational purposes only. It does not constitute legal advice, nor does it create an attorney-client relationship between the reader and the author or the firm. For specific legal queries or urgent advice regarding your rights and options, please consult with a qualified lawyer to ensure your interests are protected based on the most current laws and your specific situation.
Location: 291, Rajeev Gandhi Nagar, Instrumentation Limited Colony, Kota, Rajasthan 324005, India

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