The Reserve Bank of India (RBI) has issued a draft proposal that seeks to offer 'zero liability' for customers in third-party frauds on the account or card if they are reported within three days.

The central bank has sought public comments on the draft notification titled ‘Customer Protection – Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’.

According to the proposal, if the customer’s own involvement is not clearly established, customer liability will be limited to a maximum of INR5,000 ($74.84), if he reports within four to seven working days.

The zero liability can be claimed only if the customer is not fully or partly responsible for such unauthorised transactions taken place.

According to the proposal, a customer will have to register for alerts for electronic banking transactions.

In cases where the responsibility for the unauthorised electronic banking transaction lies neither with the bank nor with the customer but lies elsewhere in the system and when there is a delay of four to seven working days on the part of the customer in notifying the bank of such a transaction, the customer liability shall be limited to the transaction value or INR 5,000 ($74.84), whichever is lower.

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If the delay in reporting is beyond seven working days, the customer's liability shall be determined according to a bank's policy.

After being notified by the customer, the bank will have to credit the amount involved in the unauthorised electronic transaction to the customer's account within 10 working days from the date of such notification by the customer.

“Additionally, the bank should ensure that the complaint is resolved within 90 days from the date of reporting; and in case of debit card/bank account the customer does not lose out on interest, and in case of credit card the customer does not bear any additional burden of interest," RBI's draft guidelines said.