The bank is liable for unauthorized transactions due to negligence in allowing internet banking access without informed consent, particularly for vulnerable elderly customers.

1. The present First Appeal has been filed under Section 51 of the Consumer Protection Act, 2019 (hereinafter referred to as “the Act”) against the Order dated 04.08.2022 passed by the State Consumer Disputes Redressal Commission, Telangana (‘the State Commission’), in Consumer Complaint No. CC/102/2019, wherein the Complaint filed by the Complainants (Respondents herein) was allowed.

2. For convenience, the parties involved in this Appeal will be referred as per their identification in the Complaint originally filed before the Ld. State Commission. Mr. Biresh Chandra Gangopadhyay is identified as Complainant No. 1, and Smt. Aarti Gangopadhyay, wife of Complainant No. 1, is identified as Complainant No. 2. The State Bank of India, represented by the Branch Manager, Deputy General Manager, and Chief General Manager, will be addressed as Opposite Party Nos. 1 to 3 (hereinafter referred to as "OPs Bank").

3. The brief relevant facts, as per the complainants, are that they opened a joint Savings Bank Account (S.B. A/c. No. 10123103876) at Balkampet Branch of the OPs Bank. Complainant No. 2 opened three fixed deposits for Rs. 10 lakhs, Rs. 15 lakhs, and Rs. 15 lakhs (total Rs. 40 lakhs) on 09.08.2017 for a period of one year with a mandate for auto-renewal. She was issued with the FD receipts in her name. On 04.04.2019, Complainant No. 1 went to the OP Bank to update the passbook of his wife, Complainant No. 2. He was informed that the printer was not working and was given an account statement from November 2018 to March 2019. He was shocked to see that it showed a balance of only Rs. 3 lakhs instead of about Rs. 28 lakhs. He noticed that all unauthorized withdrawals were made through internet banking, although the account had "View Only" facility and did not have internet banking facility for transactions. He immediately brought this to the notice of the Branch Manager of the OPs Bank and lodged a police complaint, leading to FIR No. 240/2019 dated 09.04.2019. He has also submitted a written complaint dated 12.04.2019 to OP-1, drawing their attention to the unauthorized withdrawal of about Rs.63,00,000/- from Complainant No. 2’s Account, including the premature and unauthorized closure of three FDs amounting to Rs. 40 lakhs. The OP Bank contended that the internet banking credentials of Complainant No. 2 were compromised and OTPs were sent on each occasion when her internet banking was breached. However, the bank sidestepped the fact. The fraud could not have occurred but for the bank's actions in enlarging the scope of inherent banking transactions to permit:

a) The upgradation of "View Only" accounts to embrace all types of transactions, and

b) The premature closure of fixed deposits, which were opened physically offline, through the online facility.

4. The complainants alleged that the OP bank knew the customer was a senior citizen who had consciously opted for "View Only" access and was 'not tech savvy'. The bank's negligence in changing the transaction access without even verification left the vulnerable senior customer exposed. Thus, the bank must bear responsibility for facilitating the unauthorized transfers by enlarging the scope of INB facilities, including the use of the YONO Application, without the informed consent of Complainant No. 2. Since their grievances were not addressed and the OPs failed to share the results of their internal investigation, they filed Consumer Complaint No. 102 of 2019 before the Ld. State Commission, seeking the OP Bank to pay Rs.63,74,527/- along with interest at 18% p.a.; Rs. 25,00,000/- as compensation for mental agony and; and Rs. 20,000/- as costs.

5. In their written version before the State Commission, the OPs denied the allegations made in the complaint and contended that it is the customer's obligation to prevent unauthorized use of their mobile device and to avoid sharing the mobile banking password/PIN with unauthorized persons. They shared their mobile, PI