Nagpur Consumer Commission Directs ICICI Bank To Refund ₹5.18 Lakh To Cyber Fraud Victim

The District Consumer Disputes Redressal Commission (Additional DCF), Nagpur, has held that banks have a continuing duty to monitor suspicious transactions and cannot escape liability merely because a customer was deceived into authorising payments.

The Bench of President Satish A. Sapre and Member Milind Kedar held that ICICI Bank committed deficiency in service, negligence and unfair trade practices by failing to comply with the Reserve Bank of India’s KYC and transaction monitoring guidelines. The Commission observed that banks cannot remain passive after opening an account and are duty-bound to undertake ongoing due diligence to detect suspicious transactions that deviate from a customer’s established profile.

Facts

The complainant, Ms. Prachi Digambar Dhoke, maintained a savings account with ICICI Bank. On January 8, 2023, she received a phone call from a person posing as a FedEx Customer Service representative, who falsely informed her that an international parcel booked in her name contained two passports, five ATM cards, 300 grams of weed and a laptop. She was thereafter connected to persons impersonating Mumbai Police officials, who threatened her with criminal consequences and induced her to transfer ₹6,93,437.50 in four transactions to another ICICI Bank account towards alleged investigation and processing charges.

Realising that she had been duped, the complainant immediately informed the bank, lodged a complaint on the National Cyber Crime Portal and subsequently registered an FIR. Although ICICI Bank initially granted her a temporary (shadow) credit, it later reversed the amount on the ground that the transactions had been authenticated using OTPs. The Banking Ombudsman subsequently directed that approximately 25% of the disputed amount be credited to the complainant, leaving her to seek recovery of the remaining ₹5,18,437 before the Consumer Commission.

Contentions

ICICI Bank opposed the complaint, contending that it was not maintainable as the matter involved a criminal investigation. The bank argued that the complainant had herself authorised the transactions by authenticating them through OTPs and voluntarily transferred the money. It further submitted that the Banking Ombudsman had found no deficiency in service on its part and that the beneficiary bank, rather than ICICI Bank, had been directed to credit 25% of the disputed amount.

Observations & Decision

The Commission rejected ICICI Bank’s contention that the dispute was purely criminal in nature, holding that while the cyber fraud constituted a criminal offence, the issue of whether the bank had complied with its statutory and regulatory obligations was distinct and fell within the jurisdiction of the Consumer Commission. It observed that under the RBI’s KYC Directions, banks are required to undertake ongoing due diligence and monitor unusual or suspicious transactions.

The Commission noted that the beneficiary account, despite remaining largely inactive, witnessed transactions worth approximately ₹2.84 crore within a span of two days, which ought to have triggered enhanced scrutiny under the RBI’s KYC Directions. However, ICICI Bank failed to demonstrate that it had undertaken any monitoring or preventive action in accordance with the RBI guidelines.

The Commission further observed that even after the complainant promptly reported the fraud, the bank failed to take immediate steps to freeze the transferred funds. It, therefore, held the bank guilty of deficiency in service, negligence and unfair trade practices.

Accordingly, the Commission partly allowed the complaint and directed ICICI Bank to pay the complainant ₹5,18,437 with interest at 9% per annum from the date of filing of the complaint until realisation. It also awarded ₹25,000 as compensation for mental agony and ₹10,000 towards litigation costs, directing the bank to comply with the order within 45 days.

Case Title: Ms. Prachi Digambar Dhoke v. ICICI Bank through Branch Manager

Case No.: Consumer Complaint No. DC/AB1/484/CC/187/2023

Counsel for the Complainant: Adv. Mahendra Limaye 

Counsel for the Opposite Party: Adv. P. G. Mewar

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