The Plainspeak / Money safety
Money safety · 3 min
Unauthorised transactions in your bank account: limits on your liability
A debit you did not make. In that moment most people panic about the amount. Under the Reserve Bank's rules, the amount is not what decides your loss. The speed with which you report is.
The Reserve Bank of India has laid down exactly how much a customer can be made to bear when an electronic transaction is unauthorised. The whole framework turns on one question: was it your fault, and how fast did you tell the bank.
You owe nothing at all when
- the fault is the bank's, in its own systems or its staff, or
- the fault lies nowhere near you, somewhere else in the system, and you report it within three working days.
Report inside three working days and, as long as you did not hand over your own credentials, your liability is zero. This is the case to aim for. It is why speed matters more than anything else.
Your loss is capped when you report in four to seven days
If the fault is not yours but you report between four and seven working days, you carry a limited, capped amount. You pay the transaction value or the cap below, whichever is lower:
- Basic Savings (BSBD) accounts: 5,000 rupees
- Most other savings accounts, prepaid instruments and gift cards, smaller current and overdraft accounts, and credit cards with a limit up to 5 lakh: 10,000 rupees
- Larger current and overdraft accounts, and credit cards with a limit above 5 lakh: 25,000 rupees
Report beyond seven working days and the amount you bear is decided by the bank's own board-approved policy. This is the worst place to stand, and the only thing that puts you there is delay.
Two protections worth knowing by heart
Once you report, the bank must credit the disputed amount back to your account, as a shadow reversal, within 10 working days. You are not meant to wait months with the money gone.
And the burden of proof sits on the bank, not on you. If the bank wants to say you were negligent, the bank has to prove it. You do not have to prove your innocence.
Where your own carelessness changes the maths
If the loss happened because you shared your PIN, password or OTP, you carry the full loss up to the moment you report it. Everything after the report is the bank's. So even when you know you slipped, the instruction is the same: report at once, because reporting stops your liability growing.
The move
Keep your phone number and email registered with the bank so alerts actually reach you. Save the bank's fraud-report number now, before you need it. And the day anything looks wrong, report it in writing, the same day, and note the time you did. With an unauthorised transaction, the clock is the whole game.
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