How a Rs 20 electricity bill payment by an SBI customer led to the bank paying Rs 2.2 lakh in compensation

A ₹20 electricity bill payment attempt by a State Bank of India (SBI) customer spiralled into a ₹1.99 lakh cyber fraud case, but the National Consumer Disputes Redressal Commission (NCDRC) has granted relief, directing the bank to refund the amount along with ₹25,000 as compensation, holding that banks cannot evade responsibility when customers promptly report unauthorised electronic transactions, reported The Indian Express.

A bench of Presiding Member AVM J Rajendra (Retd) and Member Justice Anoop Kumar Mendiratta was hearing a second appeal filed by SBI against the Karnataka State Consumer Commission’s May 26, 2025 order, which had directed the refund and compensation.

“The Bank apparently cannot be absolved of the liability towards the losses suffered by the complainant on account of unauthorised electronic transactions…since the information of fraudulent transactions was shared with the Bank/OP within stipulated period,” reported The Indian Express quoting the commission said on April 15.


The national consumer commission noted that SBI failed to take adequate remedial action despite the fraud being reported promptly.

No evidence of negligence by consumer
The commission held that merely downloading a fraudulent application does not amount to negligence on the part of the consumer. It pointed out that no evidence was presented to show that OTPs were shared, and the transactions were clearly unauthorised.

“The complicity of the complainant cannot be presumed merely on account of downloading the application,” the national consumer commission observed, adding that the bank failed to establish any negligence by the customer.

Fraud triggered by fake electricity bill alert
The case dates back to July 19, 2022, when Bengaluru resident Prodosh Kumar Banerjee received a fraudulent SMS warning of electricity disconnection due to non-payment. On calling the number mentioned, he was asked to download a mobile application resembling the official electricity department interface, reported

Banerjee attempted to pay ₹20, but soon received alerts showing a debit of ₹25,000 from his SBI account, followed by another unauthorised transaction of ₹1.99 lakh, despite no OTP being shared. His phone later became non-functional.

Swift reporting, partial reversal
Banerjee immediately reported the fraud to cybercrime police, leading to the registration of a complaint and FIR. He also informed SBI via its helpline and email on the same day.

While the bank re-credited ₹25,000 and froze the account, it failed to take effective steps to reverse the larger fraudulent debit of ₹1.99 lakh.

SBI’s defence rejected
SBI argued that the fraud could not have taken place without the customer sharing sensitive details such as OTPs and claimed there was a delay in reporting the incident. However, the commission found that the fraud had been reported within hours and observed that the bank’s own action of re-crediting ₹25,000 weakened its argument, reported Indian Express.

Zero liability under RBI guidelines
The commission relied on the Reserve Bank of India’s July 6, 2017 circular, which states that customers bear zero liability in cases of unauthorised electronic transactions caused by third-party breaches, provided the fraud is reported within three working days.

Citing legal precedents, including a Gauhati High Court ruling upheld by the Supreme Court, the commission reiterated that banks must reverse such transactions within a stipulated timeframe and cannot shift the burden onto customers in the absence of negligence.

Final directions
Upholding the State Commission’s order, the national consumer commission directed SBI to re-credit ₹1,99,000 to the complainant, pay ₹25,000 as compensation, and comply within four weeks. Failing this, an interest of 8% per annum will be applicable on the defaulted amount.