Money & Banking

Banks can’t be held responsible for customer negligence: BoI chief

Our Bureau Hyderabad | Updated on December 19, 2019 Published on December 19, 2019

G Padmanabhan (right), Chairman, Bank of India and former Executive Director, RBI, and AS Ramasastri, Director of IDRBT, at the 15th International Conference on ‘Information Systems Security ICISS-2019’ at the IDRBT in Hyderabad on Wednesday.   -  Nagara Gopal

Regulator needs to come up with a solution, says G Padmanabhan

The banking regulator should come to the aid of banks which bear responsibility for financial loss arising out of the callous attitude of customers while handling online transactions, G Padmanabhan, Chairman, Bank of India and former executive director, Reserve Bank of India said.

He was speaking at the inaugural session of the 15th International Conference on Information Systems Security (ICISS) held at the Institute for Development and Research in Banking Technology (IDRBT), an arm of RBI here on Wednesday.

“While handling cheques and physical instruments, if the customer is found to be negligent, thereby compromising the security and validity of the transaction, the onus is put on the customer and not the bank.

“Similarly, if a customer is negligent and uses insecure device keys in all sensitive data in social media and unknown sites, why should banks be held responsible for the financial loss arising out of such losses?,’’ he asked.

“I strongly feel regulator need to come up with something on this front,’’ he added.

Stating that hand devices, which are used in banking transactions because of their convenience, are increasingly becoming vulnerable to malware, the banker said, adding that malware-infected devices could easily compromise security and bleed the customers/banks.

“While the cyber world has facilitated a lot in enabling a new way of delivering services by improving productivity and reducing transaction cost, it has also resulted in various threats and challenges to ensure safety for wired as well as wireless transactions,’’ Padmanabhan said. In 2018, cyber-attacks on India had increased by more than 100 per cent over the previous year against the corresponding global increase of 35 per cent.

Prone to cyber-attacks

“India was the second-most targeted country for cyber-attacks in the world, after the US, followed by Canada in the third place, whereas India’s global ranking in cyber security readiness stood at 47,” Padmanabhan said.

Published on December 19, 2019
This article is closed for comments.
Please Email the Editor