Bank Customers Protected: Delhi HC Bars Charges on Unresolved Fraud Complaints
Image Source: Internet
In a landmark ruling, the Delhi High Court has prohibited banks from charging late fees, interest, or penalties on customers who report fraudulent transactions, particularly if the complaints remain unresolved. The verdict, issued in a case involving Citibank, states that customers who have lodged complaints cannot be held liable for charges when the issues are still pending. The ruling came after advocate Sarwar Raza was wrongfully charged for a fraudulent credit card transaction of ₹76,777. Despite his prompt complaints to the bank and authorities, his grievances were dismissed, and he was subjected to coercive action, including threatening messages and visits from collection agents. The court directed Citibank to refrain from imposing charges on Raza and to restore his original CIBIL score. Additionally, a cost of ₹1 lakh was slapped on the bank, which must be paid to Raza by January 15, 2026. The court also issued several directives to the Reserve Bank of India (RBI) to strengthen its complaint-handling systems. These include ensuring that customer complaints are not rejected due to minor technical errors and allowing complainants to rectify mistakes. The RBI was also ordered to have human supervision of final rejections by the Ombudsman and to direct banks to publish a clear flowchart on their websites for complaint escalation. This ruling aims to protect bank customers from being penalized for unresolved complaints and to ensure that banks and regulatory bodies handle grievances in a more efficient and customer-friendly manner.
