Bombay HC Orders HDFC bank to refund ₹38 lakh in SIM-swap fraud case

The Bombay High Court has directed HDFC Bank to refund ₹38.04 lakh to a Pune-based businessman who lost the amount in a SIM-swap fraud , holding that the customer bore zero liability under Reserve Bank of India (RBI) guidelines.

In its April 6 order, a bench of Justices Bharti Dangre and Manjusha Deshpande ruled that the account holder, Subodh Korde , was not at fault , as the fraudulent transactions were not initiated by him. The court emphasized that the burden of proving negligence lies on the bank , and in the absence of such proof, the customer cannot be held liable.

The case dates back to July 15, 2021, when Korde lost ₹38.04 lakh through eight unauthorized transactions executed within 40 minutes . A day before the incident, three unknown beneficiaries were added and the transaction limit was increased from ₹4 lakh to ₹40 lakh without his consent. Korde stated he neither authorized these changes nor received any OTPs, and was facing network issues at the time.

Investigations confirmed it was a clear case of SIM swapping . Telecom provider BSNL reported that his SIM card had been fraudulently swapped multiple times, enabling fraudsters to intercept OTPs. A police report also established that Korde did not receive any bank alerts during the transactions.

While the fraud was carried out by cybercriminals, the court held the bank accountable for failing to ensure adequate safeguards and not disproving customer negligence. It noted that critical changes in the account occurred without effective verification reaching the customer .

The court has directed the bank to refund the amount within eight weeks , along with 6% annual interest , rising to 8% in case of delay, reinforcing strong customer protection norms in digital banking.