My ATM card was skimmed at a Kollam bank machine; who is liable for the lost funds?

Detailed Legal Analysis

The liability for lost funds due to ATM card skimming primarily falls on the bank, provided the customer has taken necessary precautions and reported the incident promptly.

In India, the regulatory framework governing ATM transactions and customer liability is outlined in guidelines set by the Reserve Bank of India (RBI) and the Payment and Settlement Systems Act, 2007. Here are the key points regarding liability in cases of ATM card skimming:

• Customer's Duty of Care: The customer is expected to exercise due diligence while using their ATM card. This includes safeguarding the PIN and ensuring that the ATM machine is secure before conducting a transaction.
• RBI Guidelines: According to the RBI's circular on customer liability dated July 1, 2016, the liability of the customer varies based on the timing of reporting the unauthorized transaction:
• If the customer reports the transaction within three working days: The customer bears no liability.
• If the customer reports the transaction between three to seven working days: The customer may be liable for losses up to ₹10,000.
• If the customer reports after seven working days: The customer may be liable for the entire loss.
• Bank's Responsibility: The bank must conduct an investigation upon receiving a complaint of unauthorized transactions. Under Section 10 of the Payment and Settlement Systems Act, 2007, banks are required to ensure security measures are in place to protect customer's financial data.
• Filing a Complaint: Customers should file a complaint with the bank as soon as they suspect skimming. This should be done through:
• Immediate reporting to the bank via their customer service number.
• Written complaint to the bank's branch or through their online grievance redressal system.
• Filing an FIR with the local police in Kollam, if necessary.
• Consumer Protection: Under the Consumer Protection Act, 2019, if the bank fails to resolve the issue satisfactorily, the customer can file a complaint with the Consumer Forum for redressal.

In conclusion, while the primary liability lies with the bank when protocols are followed by the customer, it is crucial for individuals to act swiftly and report any suspicious activity to mitigate potential losses.