SBI Debit Card Case: Can banks deny payment even if ATM pin is shared with spouse? Here’s what legal experts say

A consumer court has recently ruled in favour of the SBI in a case in which the bank said that husband can’t use wife’s debit card, even if he is using it with the consent of his wife.

If you thought – as per the general perception – that husbands and wives are made for each other and everything that one possesses belongs to the other, then think again. For, this does not hold true in case of financial products, particularly debit and credit cards. A consumer court has recently ruled in favour of the State Bank of India (SBI) in a case in which the bank said that husband can’t use wife’s debit card, even if he is using it with the consent of his wife.

However, before knowing whose fault it was and what the rules say, let us find out a little about this case.

What was the case

In the case of Mrs. Vandana vs GM, SBI Local Head Office, filed before the IVth Addl District, Consumer Disputes Redressal Forum, Bengaluru, on 21.10.2014, the Complainant (Mrs Vandana) claimed that her husband inserted the (SBI) card, entered the PIN and processed for withdrawal of an amount of Rs 25,000. But for his surprise, the cash was not disbursed and the slip was printed duly debiting the said amount from her SB account. The Complainant’s husband made a call immediately to the call center and they informed it will be credited back to the account within 24 hours or otherwise the Complainant can lodge a complaint after 24 hours only, and they can contact the respective bank for any clarification. After 24 hours, the Complainant registered the complaint with the bank on 15.11.13 and the bank replied stating that the said complaint has been attended and closed after resolution on 18.11.13.

The Complainant further submitted that, to their utter dismay, neither the money was credited nor they got any positive response. The said incidents had been intimated to the bank. They had directed it to the AGM-customer care in Bengaluru division, but they made Complainant to fill in an application which was totally not the case which she was facing. The bank had sent a message to the Complainant stating that the complaint had been resolved, without paying the Complainant’s money or crediting the amount in Complainant’s account. The Complainant further submitted that the CCTV footage of the respective ATM clearly showed that the amount was not disbursed. However, a committee formed by the Opposite Party (Bank) viewed the CCTV footage and came to a conclusion that Mrs. Vandana (Complainant) was not seen in the footage. The Complainant had clearly mentioned that it was her husband who had gone to withdraw money from the ATM as she was on maternity leave and unable to go to any place.

The cash verification report obtained through RTI showed that on 15.11.13 there had been no cash verification report available as the same was not done on that day as the machine was out of order and on 16.11.13, the cash verification report showed that there was an excess cash of Rs 25,000. The Complainant further submitted that she approached the bank several times reminding them of their obligation and duties, but every such approach was chided and ignored by them.

In this regard, a complaint closure letter was obtained from Banking Ombudsman closing the complaint on account of the PIN being shared. In this context, the Complainant issued a legal notice dated 19.07.14 for which the Opposite Party evasive replied on 31.07.14 stating that no excess cash was found in the ATM.

In her complaint made to the Consumer Forum, the Complainant sought issuance of direction to pay amount of Rs 25,000 with interest of 18% p.a. Further, Rs100 per day as per RBI guidelines of Rs 28,300, compensation of Rs 5 lakh, legal expenses of Rs 50,000 and other reliefs deemed fit for which the Complainant was entitled to.

What the Consumer Forum ruled

The IVth Addl District, Consumer Disputes Redressal Forum, Bengaluru, in its order disposed on 29.05.2018, has held that since the Complainant (holder) of ATM/ Debit Card has shared the PIN with her husband, it tantamounts to breach of condition under which the ATM/Debit cards are issued by SBI, and hence SBI is not liable to compensate holder of the card towards any loss incurred by the holder.

The Forum then dismissed the complaint filed by the Complainant.

What legal experts say

Legal experts, however, believe that the Forum should have in detail examined (a) whether the evidence first provided by SBI to the complainant that the CCTV did not show that money was dispensed by the ATM and (b) that there was a cash surplus of equal amount on immediate next day when the balance in ATM and as per books was matched was correct or not.

The SBI subsequently produced records to show that the money was withdrawn and the bank account was correctly debited. Both the evidences was not examined in detail by the Forum as to which of the version is correct,” says Sandeep Shah, Partner, N. A. Shah Associates LLP.

Shah says that the bank will not be liable to loss provided that in the first instance, the cash was disbursed. Since there are contrary documents to the effect, it was important for the Forum to have come to conclusion that the transaction did take place and thereafter a legal view on the matter should have been provided.

The Ombudsman as well as the Forum proceeded on the basis that on account of violation of the condition, the complainant was not entitled to any relief, without going into the merits of the case,” says Shah.

Rules for ATM Card usage

Commenting on the ATM card usage rules, legal experts say that it is correct that ATM card rules prescribe that the PIN/ Card should not be shared with any one. However, they also state that Bank will not bear any liability for unauthorized use of the Card. It is, therefore, imperative that the transaction of dispensation of cash should have happened at the outset and thereafter if there was a loss, the Bank could have contended that it is not liable for any loss as condition under which the card as issued was violated.

Rules as per the Application Form for the ATM card state that the transaction record generated by the ATM will be conclusive and binding unless found to be otherwise on verification and corrected by the Bank. The verified and corrected amount will be binding on the Card Holders Deposits (cash and / or cheques etc.) and will be verified by two officials of the Bank and their account will be deemed to be correct, Errors will be notified to the Card Holder by mail.

Thus, “as per the Form, before the bank account is debited, the transaction has to be verified by two officials. The Forum did not go into validating the two pieces of evidence submitted to it,” says Shah.

What should you do?

Whatever be the case, it is in your own interest not to share the PIN of your ATM card with your spouse or a close relative or friend. Otherwise, you alone will be responsible for any loss suffered by you and the concerned bank may simply refuse to bear any liability for the unauthorized use of the card.

By Sandeep Shah

This article was originally published in Financial Express. Read the article here.

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