Consumer Commission orders Canara Bank to pay ₹5.04 lakh for unauthorized transactions

Advocate Vaijanath S. Zalki handed over a copy of the judgment to complainant Siddayya Nandikol in Kalaburagi recently. | Photo credit: ARUN KULKARNI

The District Consumer Disputes Redressal Commission, Kalaburagi, has ordered Canara Bank’s Station Bazar branch to pay ₹4.84 lakh along with interest to a customer whose savings bank account was subjected to three unauthorized transactions.

The order was passed on September 29, 2026 in a case filed by Siddayya Nandikol of Hirapur against the Branch Manager, Canara Bank, Station Bazar Branch, Kalaburagi.

According to the judgment, three unauthorized deductions of ₹2, ₹2,000 and ₹84,000 were made on 17 March 2025, totaling ₹4.84 lakh. The bank advised him to approach the cyber police, after which he lodged a complaint.

However, the bank claimed before the Commission that the transactions took place because the complainant shared his OTP and other account details. He denied the deficiency in delivery and demanded that the complaint be dismissed.

After considering the evidence and documents submitted by both the parties, the Commission held that the bank failed to prove through convincing documentary evidence that the complainant shared his OTP or confidential bank details.

The commission relied on the RBI guidelines on protecting customers from unauthorized e-banking transactions. It held that the complainant had reported the transactions to the bank and the police on the same day and therefore his liability was nil as per the applicable RBI guidelines. The judgment also states that banks must have appropriate systems and procedures, including robust fraud detection and prevention mechanisms, to protect customers from unauthorized electronic transactions.

The Commission also referred to the judgment of National Consumer Disputes Redressal Commission in State Bank of India v. Prof . KP Sreenath. The Commission has taken note of the principle that the burden of proof of negligence or sharing of OTP, bank details or other confidential information by the account holder is on the bank.

The commission, comprising acting president Malati Guranna and member M. Lokesh, partially upheld the complaint and termed the bank deficient in services. He ordered the bank to pay ₹4.84 crore with interest at 6% per annum from the date of complaint till realization for the unauthorized transactions. He also awarded ₹15,000 as compensation for lack of service and ₹5,000 for legal costs. Hence, the amount due on the order is ₹ 5.04, excluding the interest ordered on the transaction amount of ₹ 4.84.

The bank was requested to make the payment within 45 days from the date of the order. In case of non-compliance, the Commission ordered refund of ₹5.04 lakh with interest at 8% per annum from September 20, 2025 till realization.

“The order emphasizes the importance of prompt reporting of unauthorized e-banking transactions, preservation of documentary evidence and recourse to appropriate legal forum if such complaints are not properly redressed,” said advocate Vaijanath S. Zalki, who provided legal advice and represented Mr. Nandikol.

Published – 02 Oct 2026 18:52 IST