ATM Fraud Case: SBI Penalized for Failing to Assist Customer After Failed Transaction

A serious case of ATM fraud has resulted in a legal setback for the State Bank of India (SBI) after it failed to address a customer’s complaint adequately. In a long-standing dispute, a customer lost ₹20,000 due to unauthorized withdrawals following a failed ATM transaction—and the Delhi State Consumer Forum has now ordered the bank to repay the amount with 10% annual interest, along with compensation for mental harassment.

🏦 What Happened?

The incident dates back to January 4, 2014, when SBI customer Mr. Panwar tried withdrawing ₹1,000 from an ATM at Guwahati Railway Station. The transaction failed, so he withdrew money from a nearby Indian Overseas Bank ATM and boarded a train to Delhi.

Shortly after, while on the train, he received three SMS alerts showing successful debits from his SBI account—₹1,000, ₹20,000, and another ₹1,000. However, Panwar had not made these transactions, and the only one he attempted was unsuccessful.

❌ Bank's Lack of Support

• Upon reaching Delhi, Panwar lodged a complaint with SBI and requested CCTV footage of the ATM.

• SBI failed to respond.

• He then filed complaints online and also approached the RBI Banking Ombudsman—twice.

• The first complaint was lost, and the second was ignored.

Eventually, he was forced to move the Delhi District Consumer Forum, accusing SBI of negligence and mental harassment, and demanding both a refund and compensation.

⚖️ What Did the Consumer Forum Say?

• On October 25, 2017, the District Consumer Forum ruled in favor of Panwar:

  • SBI was ordered to refund ₹20,000 (fraudulent withdrawal).

  • Pay 10% interest annually from January 4, 2014 until the refund date.

  • Pay ₹10,000 as compensation for mental harassment.

SBI challenged the ruling in the Delhi State Consumer Forum, but the forum upheld the original judgment on May 7, 2025, and directed the bank to pay immediately.

🔍 Key Takeaways for Customers

Always monitor ATM transactions via SMS and bank apps.

Report failed transactions immediately to your bank.

If unresolved, file complaints with the RBI Ombudsman or consumer forum.

Keep evidence like SMS alerts, receipts, and timestamps.

Don't give up—legal recourse can lead to justice, even years later.

💬 Final Word

This case is a wake-up call for both customers and banks. For customers, it's a reminder to act swiftly and persistently when something goes wrong. For banks, it’s a signal that negligence in handling customer grievances can prove costly, both financially and in terms of credibility.

If you've faced similar issues, remember: the law is on your side—stay alert and informed.