Money stolen from your NRI

Bank Account – What are your

options?

Money stolen from your NRI Bank Account – Now What? What are the chances you will get your money back? Will your bank in India help? Will you have to file a civil lawsuit against your bank to recover your money? Credit card fraud gets a lot of attention these days but how about when money is lost from a person’s back account due to an account being hacked or perhaps negligence by the bank! Here is a scenario where a bank in India receives an email supposedly from one of their account holders asking them to transfer Rupees 20 Lakh from his non-resident account to another account at Barclays Bank in UK. On receiving the email, the bank sought confirmation from the account holder via email, And the same was confirmed. The bank then transfered the 20 Lakh to the UK bank account the same day. Seems strange, but it’s true. This is just one example as there have been many more instances reported in the Indian news media.

What happens if money from your NRI Bank

account is stolen?

Most NRIs perhaps have non-resident bank accounts in India such as NRO or NRE accounts, however none of us ever think about what would happen or what they could do if money goes missing from their bank accounts. During a visit to India in December 2016, I saw a documentary on one of India’s news channels NDTV hosted by Mr. Ravish Kumar and was surprised to learn that to a large extent there is almost nothing that can be done to recover money fraudulently taken from your Indian bank accounts. The chances of recovery of money stolen from your bank account is quite low. There are so many hurdles with no clear path to recovery. The law is not very clear and banks are generally inclined never to admit fault and blame the customer for negligence in keeping their log in details safe. In the rare case where eventually if and when some money is eventually recovered, the long procedure and aggravation will certainly take its toll on such account holders.

Loss of money from bank account and

recourse . . .

Generally money goes missing from NRI account’s when someone is able to steal an account holder’s identity and trick banks in India into believing they are dealing with the account holder. There is also a possibility that the bank may also be at fault due to insecure software or unethical employees. According to media reports 70 percent of ATM’s in India are still run on Microsoft’s windows XP operating system and an easy target for hackers. Regardless of the reasoning as to why theft from a bank account occurs, lets discuss what happens if money indeed goes missing from your bank account. Consider the following: When Money is fraudulently taken from your NRI bank account, obviously you contact the bank to complain about the loss. Don’t expect the money to be paid back by the bank as soon as you notify them of a theft of money from your account. Following your complaint, your bank will change your log in details etc. to stop further loss from your account and tell you they will investigate. After the banks investigation, which may take a few days or weeks, you might be held responsible by the bank for not keeping your credentials safe. Banks generally are not inclined to admit fault or accept liability easily. Depending on the amount of money involved, you may eventually have no choice but to either suffer the loss or to file a police complaint and/or file a lawsuit against the bank in an effort to recover your lost money. No easy task for an NRI sitting thousands of miles away in a different country. When it comes to filling a police complaint for online bank account theft, it’s not easy determining the jurisdiction where to file the complaint. Filing a FIR complaint at a police station in India is no easy task even for local residents. Since online frauds originate from abroad, you may have to file a complaint eventually with India's Cyber Appellate Tribunal in an effort to recover your money from the bank where the loss occurred from. Cyber Appellate Tribunal The only Cyber Appellate Tribunal in India is in Delhi and as per a report by NDTV news channel in India, there is no judge currently at the Tribunal. The last Judge at the Appellate Tribunal retired several years ago and for the last five and a half years no replacement judge has been appointed. With no judge to decide, their has been no case decided in the Appellate Tribunal since June 30, 201. A look at the website of the Appellate Tribunal shows the last case decided as being on June 30, 2011. Other than join the queue there may be no other choice for the time being for those approaching the Cyber Appellate Tribunal for justice. Some NRIs may perhaps want to file complaints with the Reserve Bank of India [RBI] against their banks, so here is some information on what the RBI stand is on issues where unauthorized withdrawals are made electronically from Indian bank accounts. RBI Guidelines on customer liability RBI has issued a draft circular dated August 11, 2016 for public comments on customer protection and liability when unauthorized transactions occur due to electronic banking. On the liability of a customer where fraud occurs they say: A customer shall be liable for the loss occurring due to fraudulent transactions in the following cases: (a) In cases involving negligence by a customer, such as where he has shared the payment credentials, the customer will bear the entire loss until he reports the unauthorized transaction to the bank. Any loss occurring after the reporting of the unauthorized transaction shall be borne by the bank . . . Let’s try and understand this. If someone hacks your computer and gets your password, then the bank can always maintain that you were at fault for not taking precautions to protect your passwords. Which would make you liable for the loss. The bank after you report it will obviously change passwords etc. to avoid further loss from the account, however what is already gone may end up being your responsibility. To read the RBI document dated August 11, 2016 Click HERE

What can NRIs do to protect their NRI Bank

Accounts

Simply keeping your passwords safe and unique is not the only way. My advice would be to limit your exposure by accessing why you need a non-resident bank account in India and then use it only for that purpose. Here are some suggestions: If you do not use online banking for your NRI account then get this disabled Some people may not check their NRI accounts for several months at a time. Check your account periodically. Remember that in case you discover a problem in your account, your liability to further loss will end as soon as you notify the bank. Also in case where a loss occurs in an account and it is held that both the customer or bank are not at fault then if the bank is notified by the customer within 3 working days the customer liability in such a case according to the RBI guideline would be zero! However, if notification by the customer is given between 4 to 7 days then the customers liability will be Rupees 5000 or lower depending on the loss. Any report that is made to the bank after a lapse of 7 working days or more will be as per your bank boards policy. Generally NRI accounts are for many non- residents a good source to earn extra interest as interest rates abroad are way too low. For some NRIs this was also a way to avoid taxes in their home countries. With the fluctuation in Indian and foreign currencies and stricter banking information exchange between countries taking place periodically, it may be time for NRIs to reevaluate their bank account requirements in India. Keep in mind that sending money to your NRI account in India is a lot simpler than getting it back to your home country.