Follow us on Google News
A district consumer commission in Delhi has directed Canara Bank to refund ₹4,14,488 to a woman who lost ₹5.44 lakh through unauthorised electronic transactions in April 2024.
The commission also awarded ₹1 lakh as compensation and ₹50,000 towards litigation expenses, holding that the bank failed to establish that the customer had voluntarily authorised the disputed transactions or was solely responsible for the loss.
The order, pronounced on October 28, 2026, addresses the legal distinction between authenticating a banking transaction and proving that a customer consented to it.
How Did the Cyber Fraud Occur?
The complainant, Vinita, received a fraudulent telephone call on April 7, 2024, around 4 pm. The following morning, two unauthorised transactions of ₹5 lakh and ₹44,488 were carried out through IMPS from her Canara Bank savings account.
Vinita immediately reported the incident to the cybercrime helpline and approached the bank to block her account.
https://the420.in/fcrf-certified-chief-ai-officer-second-cohort-november-2026/
However, she alleged that the bank failed to provide timely assistance and directed her to another branch. Of the ₹5,44,488 lost, only ₹1.30 lakh was recovered, leaving ₹4,14,488 outstanding.
Why Did Canara Bank Refuse Liability?
The bank argued that Vinita had interacted with fraudsters and shared her mobile screen, potentially compromising confidential banking information.
It maintained that the transactions were authenticated using banking credentials, including MPIN, UPI PIN and OTPs.
Canara Bank relied on the Reserve Bank of India’s July 6, 2017, circular governing customer liability for unauthorised electronic banking transactions.
The bank contended that losses arising from customer negligence remained the customer’s responsibility until the incident was reported.
Why Was the Bank Held Responsible?
The commission, comprising President Poonam Chaudhary and Member Bariq Ahmad, found that successful technical authentication did not necessarily establish voluntary authorisation.
It observed that Canara Bank failed to produce sufficient technical evidence, including IP logs, device verification records, beneficiary-addition logs and transaction audit trails.
The commission also noted the absence of evidence establishing whether applicable security safeguards had been followed. Although sharing a mobile screen could amount to negligence, the bank had not proved that the entire loss resulted solely from the complainant’s conduct.
What Is the Legal Significance?
The commission relied on the National Consumer Disputes Redressal Commission’s ruling in State Bank of India v. Pradosh Kumar Banerjee, distinguishing technical authentication from genuine customer consent.
It also rejected the argument that a pending cybercrime investigation prevented it from deciding the consumer complaint. The commission held that the bank’s failure to satisfactorily address the disputed transactions amounted to deficiency in service.
What Compensation Must Canara Bank Pay?
The commission ordered Canara Bank to refund ₹4,14,488 with 9% annual interest from April 8, 2024, until payment. It additionally awarded ₹1 lakh for mental agony, harassment and inconvenience, along with ₹50,000 in litigation expenses.
The bank must comply within 45 days. In case of default, the amount payable will attract further interest at 12% annually from the date of default until realisation. The ruling reinforces that banks cannot rely solely on successful credential authentication to establish customer liability in disputed cyber fraud transactions.
