Consumer Commission directs Canara Bank to pay ₹5.04 lakh over unauthorised transactions
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Advocate Vaijanath S. Zalki handing over a copy of the judgment to complainant Siddayya Nandikol in Kalaburagi recently. | Photo Credit: ARUN KULKARNI
The District Consumer Disputes Redressal Commission, Kalaburagi, has directed the Station Bazar branch of Canara Bank to pay ₹4.84 lakh, along with interest, to a customer whose savings bank account was subjected to three unauthorised transactions.
The order was passed on September 29, 2026, in a case filed by Siddayya Nandikol of Hirapur against the branch manager, Canara Bank, Station Bazar branch, Kalaburagi.
According to the judgment, three unauthorised deductions of ₹2 lakh, ₹2 lakh and ₹84,000, totalling ₹4.84 lakh, were made from Nandikol’s savings bank account on March 17, 2025. After noticing the transactions, he informed the bank and also approached the Cyber Police on the same day. The bank advised him to approach the Cyber Police, following which he lodged a complaint.
The bank, however, contended before the Commission that the transactions had occurred because the complainant had shared his OTP and other account details. It denied deficiency in service and sought dismissal of the complaint.
After considering the evidence and documents produced by both sides, the Commission held that the bank had failed to establish through cogent documentary evidence that the complainant had shared his OTP or confidential banking credentials.
The Commission relied on the RBI’s guidelines on customer protection in unauthorised electronic banking transactions. It noted that the complainant had reported the transactions to the bank and the police on the same day and, therefore, his liability was zero under the applicable RBI guidelines. The judgment also noted that banks are required to have appropriate systems and procedures, including robust fraud detection and prevention mechanisms, to protect customers against unauthorised electronic transactions.
The Commission also referred to a National Consumer Disputes Redressal Commission judgment in State Bank of India v. Prof. K.P. Sreenath. The Commission noted the principle that the burden of proving negligence or sharing of OTP, bank details or other confidential information by the account holder lies on the bank.
The Commission, comprising in-charge president Malati Guranna and member M. Lokesh, partly allowed the complaint and held the bank deficient in service. It directed the bank to pay ₹4.84 lakh towards the unauthorised transactions, with interest at 6% per annum from the date of the complaint till realisation. It also awarded ₹15,000 as compensation for deficiency in service and ₹5,000 towards litigation costs. Thus, the amount payable under the order works out to ₹5.04 lakh, apart from the interest ordered on the ₹4.84 lakh transaction amount.
The bank was directed to make the payment within 45 days from the date of the order. In the event of failure to comply, the Commission ordered recovery of ₹5.04 lakh with interest at 8% per annum from September 20, 2025, until realisation
“The order highlights the importance of promptly reporting unauthorised electronic banking transactions, preserving documentary evidence and approaching the appropriate legal forum when such grievances are not properly redressed,” advocate Vaijanath S. Zalki, who, provided legal advice and represented Mr. Nandikol, said.
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