Yes, a bank can be liable for an unauthorized transaction, depending on the circumstances and how quickly the customer reports it.
In India, if a transaction occurs without the customer's authorization and the customer reports it promptly, the customer's liability may be zero or limited, depending on the applicable RBI rules and the circumstances of the case. Banks are generally expected to investigate the complaint and take appropriate action.
However, if the customer shared sensitive credentials such as an OTP, PIN, password, or UPI PIN, the bank may examine whether the customer contributed to the transaction. This does not automatically mean the customer loses all protection; the specific facts and timing of the report matter.
