Module: | KYC, NPAs, Advances & Investment Valuations
Q212: Scenario: A high-net-worth individual holds a Current Account with an overdraft limit of ₹40 Lakhs. He falls victim to a third-party electronic banking breach and reports it to the bank on the sixth working day. The bank initiates its investigation and processes the reversals. Based on RBI guidelines, consider the following statements:
1. Because the breach was reported between 4 to 7 working days, the maximum liability for this specific Current Account profile is strictly capped at ₹25,000.
2. If the delay in reporting had extended beyond 7 working days, the customer's liability would be determined strictly as per the bank's Board approved policy.
3. The bank must ensure that the fraud complaint is resolved, liability is established, and a final response is issued within a maximum of 30 calendar days from receipt.
4. Any shadow reversals or compensation credits processed by the bank must be value-dated to the date the complaint was lodged, rather than the original date of occurrence.
Which of the statements given above is/are correct?
2. If the delay in reporting had extended beyond 7 working days, the customer's liability would be determined strictly as per the bank's Board approved policy.
3. The bank must ensure that the fraud complaint is resolved, liability is established, and a final response is issued within a maximum of 30 calendar days from receipt.
4. Any shadow reversals or compensation credits processed by the bank must be value-dated to the date the complaint was lodged, rather than the original date of occurrence.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statement 1 is correct: The liability framework dictates that for Current and Overdraft accounts with limits above ₹25 lakh, the liability is strictly capped at ₹25,000 if the third-party breach is reported within the 4 to 7 working days window.
Statement 2 is correct: The guidelines mandate that for reporting delays beyond 7 working days, the standardized caps dissolve entirely, and liability is governed exclusively by the bank's internal Board-approved policy.
Statement 3 is correct: The updated amendments drastically tighten the resolution timeline, mandating that the entire complaint cycle—from receipt to final liability establishment—must be concluded within a maximum of 30 calendar days.
Statement 4 is incorrect: The directives explicitly require that all shadow reversals must be value-dated to the original date of occurrence (the exact day the fraud happened) rather than the date of complaint, to completely insulate the customer from any loss of interest.
Statement 2 is correct: The guidelines mandate that for reporting delays beyond 7 working days, the standardized caps dissolve entirely, and liability is governed exclusively by the bank's internal Board-approved policy.
Statement 3 is correct: The updated amendments drastically tighten the resolution timeline, mandating that the entire complaint cycle—from receipt to final liability establishment—must be concluded within a maximum of 30 calendar days.
Statement 4 is incorrect: The directives explicitly require that all shadow reversals must be value-dated to the original date of occurrence (the exact day the fraud happened) rather than the date of complaint, to completely insulate the customer from any loss of interest.