Bengaluru | November 28, 2025 – A Bengaluru Urban I Additional District Consumer Commission has directed Canara Bank to refund ₹1,75,000 to a 57-year-old Uttarahalli resident who lost the money in a cyberfraud. The commission ruled that the bank was responsible for failing to detect and prevent the unauthorized transactions, constituting a clear deficiency in service.
Unauthorized Transfers Trigger Legal Battle
The case dates back to May 4, 2024, when the complainant, BC Gayatri, discovered four unauthorized withdrawals from her Canara Bank savings account, totaling ₹1,75,000. Gayatri, who relies solely on her debit card, had no internet banking, mobile banking, or UPI facilities. Her salary is credited into this account, which she primarily used for cash withdrawals.
Immediately after noticing the transactions, Gayatri reported the matter to the bank and filed a police complaint. An FIR was registered on May 6, 2024. When the bank did not reimburse the amount, she approached the banking ombudsman, but the complaint remained unresolved. On July 15, 2024, she issued a legal notice to the bank, and subsequently filed a consumer complaint on September 4, 2024, alleging deficiency in service.
Bank Claims Transactions Were Authorized
In its defense, Canara Bank argued that Gayatri’s account had been used to authorize the transactions via her registered mobile device, asserting that mobile banking and UPI registration require validation through debit card details, OTPs, and activation codes. The bank maintained that the transactions were properly authenticated using MPIN/UPIN and login credentials, and that SMS alerts were sent to the registered number. It requested the complaint be dismissed, contending the complainant had not approached the forum with clean hands.
Consumer Commission Places Burden of Proof on Bank
The commission noted that while the burden of proof generally lies with the complainant in deficiency cases, Gayatri’s testimony was consistent and corroborated by the absence of mobile banking, internet banking, or UPI apps on her phone. The bank did not dispute these facts, nor did it deny that the complainant promptly informed it of the fraudulent withdrawals and filed a police complaint.
The commission concluded: “The complainant suffered a loss without any negligence on her part, and all transactions from her account were unauthorized and fraudulent. Therefore, the responsibility for such transactions rests with the bank, which has access to modern technology to detect and prevent such fraud.”
Bank Held Liable for Deficiency in Service
Observing that the bank failed to utilize available technology to prevent unauthorized transactions, the commission ruled in favor of Gayatri. On August 11, 2025, Canara Bank was directed to refund ₹1,75,000 with 6.5% interest from the date of complaint filing until realization, along with ₹2,000 in legal costs.
The case underscores the importance of vigilance and accountability in banking services, particularly in the growing environment of cyberfraud, and sets a precedent for consumer protection in instances where financial institutions fail to prevent unauthorized digital transactions.
