Consumer Court Orders SBI to Compensate Victim of Fraudulent Transaction

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Published on: November 10, 2023 at 11:28 IST

In a significant legal victory for consumers, the III Additional Bangalore Urban District Consumer Disputes Redressal Commission has ruled in favor of K. Venkatasubbaiah, a retired professor, who filed a complaint against the State Bank of India (SBI).

The case revolved around a fraudulent transaction that resulted in financial loss for the complainant. The judgment, delivered on October 20, 2023, establishes an important precedent for consumer protection.

Case Background:

K. Venkatasubbaiah, an 83-year-old retired professor residing in Bengaluru, took legal action against the State Bank of India after becoming a victim of a fraudulent transaction.

On October 30, 2021, a sum of Rs. 64,000 was debited from his savings and fixed deposit accounts with the bank, purportedly initiated by an unknown individual.

Despite filing a cyber complaint with the local police station and notifying the bank about the fraudulent transaction promptly, Venkatasubbaiah received no response or resolution from either party.

The mounting mental and financial stress led him to seek relief through the Consumer Disputes Redressal Commission.


The ruling, delivered by the Commission comprising Shivarama K. (President), Rekha Sayannavar, and Chandrashekar S. Noola (Member), highlighted the State Bank of India’s deficiency in service. The bank’s failure to protect the complainant’s accounts and its inability to trace the allegedly fraudulent transaction were significant points of contention.

The Commission stated, “By considering all the documentary evidence on hand, we feel the opposite party failed to safeguard the amount in the complainant’s account with regard to the savings account as well as the F.D. account.

It also failed to trace out the alleged amount even after receiving the written complaint from the complainant. It is the duty of the opposite party bank to conduct a proper investigation after receiving the customer’s/complainant’s written complaint.”

The judgment also referenced a circular issued by the Reserve Bank of India (RBI), titled “Customer Protection Limiting Liability of Customers in Unauthorized Electronic Banking Transactions,” dated July 6, 2017. Under this circular, the complainant was classified as a “zero liability” customer.

The III Additional Bangalore Urban District Consumer Disputes Redressal Commission ruled in favor of the complainant. The State Bank of India was directed to refund the entire sum of Rs. 64,000 to the complainant, with interest calculated at 9% per annum from October 30, 2021, until realization.

In addition to the monetary compensation, Venkatasubbaiah was awarded Rs. 25,000 for the mental stress and financial hardships he endured during the ordeal. Furthermore, he was granted an additional Rs. 5,000 to cover the cost of litigation.

This judgment underscores the importance of consumer protection in cases involving electronic banking transactions, particularly for senior citizens and vulnerable customers.

The ruling establishes a significant precedent for holding financial institutions accountable for safeguarding customer accounts and promptly addressing fraudulent transactions.

The State Bank of India has been given 45 days to comply with the order. Failure to do so will result in the outstanding amount incurring interest at 9% per annum until realization.

Case Name: K. Venkatasubbaiah Vs Manager, State Bank of India Branch Case No.: CC: 217/2023

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