Bank and Financial Fraud Laws in India — Complete Guide for Asansol

Immediately inform bank to freeze accounts and reverse transactions. File FIR at police station or cyber crime cell. File complaint with Banking Ombudsman. Approach consumer forum for deficiency in service. File civil suit for recovery of lost funds. Criminal prosecution under IPC and IT Act for fraud.

The Banking Ombudsman Scheme provides free grievance redressal for bank customers. Complaints up to Rs. 20 lakh can be filed. Ombudsman resolves disputes through conciliation or passes award. Appeal lies to Appellate Authority. Complaint must be filed within 1 year of cause of action.

The first twenty-four hours after a bank fraud are the most important for the victim of the fraud. The customer should immediately inform the bank of the unauthorised transaction, so that the accounts can be frozen and further debits stopped, and should obtain a written acknowledgment of the complaint that is lodged with the branch.

A complaint should also be lodged with the local police station or with the cyber cell, and the complaint number should be preserved for reference in the matter. For fraud that is committed over the telephone or through an electronic channel, the National Cyber Crime Reporting Portal and the 1930 helpline, which feed into the Reserve Bank of India's reporting mechanism, are the correct channels to use.

The customer should preserve all of the digital evidence, including SMS messages, emails, transaction references, call logs and the receipts of the payments that were made. These materials are what the bank, the police and ultimately the court will rely upon in order to establish the fraud and to trace the funds that were lost.

Whether the victim can recover the amount that was lost depends on how quickly the fraud is reported to the authorities. Under the Reserve Bank of India's guidelines on unauthorised electronic transactions, if the customer reports the fraud promptly and has not himself contributed to the loss, the bank is generally required to compensate the victim in full.

Where a transfer has been moved to another account, the banks can freeze the receiving account on intimation and, in many cases, can recall the funds if swift action is taken before the money is withdrawn by the fraudster. This is precisely why immediate reporting to the branch and to the 1930 helpline is so decisive.

If the bank resists payment, the customer may escalate the matter to the Banking Ombudsman for a decision or may file a civil claim for recovery of the amount. An advocate who is involved at this stage can prepare the claim, preserve the evidence and negotiate with the bank to protect the interest of the victim.

Most bank fraud reaches the customer through shared credentials, an unverified link or a convincing call that is made to the victim. The first line of defence is to treat the OTP, the PIN, the password and the card number as strictly confidential and never to share them with any person who telephones claiming to be calling from the bank.

For online banking in and around Asansol, the customer should verify the sender of every message, install applications only from official stores, check the name of the bank within payment applications and avoid clicking on links that ask for the login details or for an OTP. Where the mobile number and the email are linked to the bank account, the customer should also add an extra layer of two-factor authentication for safety.

Regularly checking the bank statement alerts the customer to the small test transactions that fraudsters place before a larger withdrawal is attempted by them. Where a suspicious entry is found, the bank should be informed at once and the card or the account should be re-issued before any further loss occurs. Keeping the daily limits on cards small also limits the damage in the event that the instruments are misused by a fraudster.

A bank fraud matter sits at the meeting point of civil liability and criminal law. The role of the advocate is first to preserve the evidence, to lodge the complaint in the right forum and to advise on whether the remedy lies with the bank, with the police or with the Banking Ombudsman. The choice of the forum depends on the amount involved and on the quality of the evidence of the fraud that is available.

On the criminal side the complaint may attract the offences of cheating, criminal breach of trust or forgery, which requires the investigation to be followed through the police station and through the district court. The advocate assists the victim in filing the FIR and in pursuing it through every stage of the investigation. A cogent first information report that sets out the facts and names the evidence helps the investigation to move forward smoothly.

While the police investigation proceeds, the civil track continues to protect the money of the victim. The advocate drafts the claim for recovery and the precautionary applications that freeze the wrongful gains, so that the criminal and the civil proceedings together give the victim the best possible chance of restitution. The advocate also advises on protecting the property of the fraudster so that it remains available to meet an eventual order for payment.