SBI ATM Fraud: SBI Asked To Provide Complete Refund To Victim With 10% Interest

On January 04, 2014, Mr. Panwar's State Bank of India (SBI) ATM card was used, without his consent, to withdraw cash from three ATMs at Guwahati Railway Station. He then lodged a complaint against SBI that the incident occurred without his knowledge, and the bank was not justified in having authorised these transactions. He even disclosed the ATM numbers, ATM 414, ATM 8024, and ATM 40040, where the unauthorised withdrawals had occurred.

Mr Panwar first visited an SBI ATM to withdraw Rs 1,000, but the transaction was unsuccessful. He withdrew Rs 1,000 from a different bank's ATM successfully and boarded his train to Delhi. Moments after departure, he got three SMS notifications from SBI informing him that Rs 1,000, Rs 20,000, and another Rs 1,000 had been withdrawn from his account using his card.

When he arrived back in Delhi, he filed a complaint with the SBI. The bank paid only Rs 1,000, stating the Rs 20,000 transaction was genuine. Mr Panwar repeatedly followed up, even asking for CCTV footage, but the bank did nothing concrete. He then approached the RBI Banking Ombudsman but still failed to find redress. Finally, he approached the Delhi District Consumer Forum, alleging poor service and seeking a refund.

In October 2017, the Forum adjudicated in his favour. It cited RBI guidelines stating customers will never incur any loss if they report unauthorised electronic transactions within three working days. The Forum directed SBI to reimburse Rs 20,000 with 10 per cent interest from the day of fraud, along with Rs 10,000 for mental torment and Rs 5,000 as legal costs.

Rather than obeying the order, SBI had appealed to the Delhi State Consumer Commission. The bank alleged that Mr Panwar hadn't provided his train ticket to corroborate that he wasn't in Guwahati when he made the withdrawal and suggested that he could have executed the transaction himself. However, the Commission held that the customer had already produced bank statements and SMS messages as proof. 

It also pointed out that SBI failed to produce any solid evidence to substantiate its allegations. For instance, although SBI asserted that its branch manager had passed away and could not attend to the case, it never provided a death certificate or a valid reason for missing hearings.

On May 07, 2025, the Delhi State Consumer Commission rejected the appeal of SBI. It stated there was no error in the previous judgment by the District Forum. The Commission severely censured the bank for not considering the matter seriously and not appearing before the court with rightful documents or defence.

If SBI decides to abide now, then it will have to pay Rs 58,000 to Mr. Panwar. That consists of the initial Rs 20,000, interest of approximately Rs 23,000 over 11.5 years, and Rs 15,000 in damages and litigation expenses.

This case reminds customers of the importance of reporting fraud promptly. As per RBI norms, if reported within three working days, the customer is not responsible for the loss. The judgment also sends a message to banks to step up grievance redressal and follow up on complaints in a timely manner.