The Delhi High Court has directed the State Bank of India (SBI) to compensate a victim of cyber fraud, ruling in favor of the petitioner who had lost a significant amount of money due to fraudulent transactions. The court’s decision emphasizes the responsibility of banks to ensure the security of their customers’ accounts and to address fraud-related issues promptly.
Background:
The case involved a customer who had fallen victim to a cyber fraud scheme, resulting in unauthorized transactions from their SBI account. Despite reporting the incident, the bank had failed to provide adequate relief, leading to the customer filing a petition with the Delhi High Court. The petitioner argued that the bank had neglected its duty to safeguard account information, thus allowing the fraud to take place.
Court’s Rationale:
In its ruling, the court highlighted that banks are obligated to protect their customers from cyber fraud by implementing robust security measures. It observed that financial institutions must take swift action when fraud is reported and ensure victims are compensated for any losses incurred due to their negligence. The court also stressed that banks should adopt preventive measures and offer better safeguards to prevent similar incidents in the future.
Existing Measures:
While banks are legally required to provide basic security features, such as two-factor authentication and fraud monitoring systems, the court emphasized that the enforcement of these protections must be strengthened. Additionally, banks are expected to act promptly when customers report fraud, providing immediate support and assistance in recovering lost funds.
Conclusion:
The Delhi High Court’s directive for SBI to compensate the cyber fraud victim sets a precedent for banks to enhance their cybersecurity measures and ensure customer protection. It also signals that banks must be more accountable in addressing cyber fraud claims and providing timely relief to affected customers.