Kerala High Court orders the State Bank of India to restore Rs 3.73 lakh lost to cyber fraud

23 October 2026

In Remadevi T.L. v. Reserve Bank of India, reported as 2026 LiveLaw (Ker) 591, Justice Harisankar V Menon of the Kerala High Court directed the State Bank of India to restore Rs 3.73 lakh lost by a customer in an unauthorised electronic transaction, within four weeks. The petitioner relied on clause 6(ii) of the Reserve Bank of India's Master Circular on customer liability for unauthorised electronic banking transactions, which gives a customer zero liability if the bank is notified within three working days. The bank had relied on clause 7(i), which deals with loss arising from a customer's negligence in sharing payment credentials. The Court found that the bank had not shown the petitioner was privy to the fraud and that she had reported it promptly to the bank and the police, so her case fell under clause 6(ii). It set aside the order of the Banking Ombudsman.