Amount wrongly credited to a different bank account
Recovery of cash Paid by Mistake to the credit of a Bank account:
Of late cases, claiming a refund on account of wrong credit thanks to mistake of payment is on the increase , especially in electronic transactions like NEFT/RTGS. Bankers should take care while receiving such requests and make sure that it's genuine wrong payment and undue to trade dispute or breach of contract between remitter and beneficiary. In such cases, the remedy for the remitter is to settle the matter legally. In other cases, the error of payment may happen due to the subsequent
• an error made by the person sending the cash (for example, entering the incorrect account number on a transfer form or online transaction, or unwittingly sending money to an old account number that has been reallocated by the bank to a different customer);
• a failure by the Bank handling the payment for the sender (for example, a bank making an error when copying down account information given by the consumer); or
• a failure by the Bank receiving the payment (for example, a bank putting the cash into the incorrect account, or not making sufficient checks before releasing the cash to a 3rd party.
Recovery of cash Paid by Mistake to the credit of a Bank account- Supreme Court Ruling:
Supreme Court during a case had held that if a 3rd party, by mistake deposits the cash within the account of another person, as soon because the money is deposited within the account of such person , who may be a customer of the bank, the cash becomes the cash of customer, and it's not hospitable the bank in such circumstances, without obtaining the consent of the customer, to reverse the entry of credit made in his account and in effect pay back the cash to the one that had deposited it, albeit it'd are deposited by mistake.
Section 72 of the Contract Act:
The Bank,of course, features a right to recover the cash paid under an error as per Section 72 of the Indian Contract Act, which reads as under:
•. Liability of person to whom money is paid or thing delivered by mistake or under coercion.- an individual to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.
However, even in such cases, it's been tested during a court of law that cash paid by mistake can't be recovered, if the position of the one that received it's been altered or already he had acted in straightness that the credit belongs to him.
The gist of RBI guidelines on Electronic payment products-RTGS/NEFT - Processing inward transactions based solely on account number information
Responsibility to supply correct inputs within the payment instructions, particularly the beneficiary account number information, rests with the remitter/originator.
Banks should put suitable disclaimers on the fund's transfer screens within the online / internet banking platform and funds transfer request forms advising customers that credit are going to be effected based solely on the beneficiary account number information and therefore the beneficiary name particulars won't be used therefor.
Originating banks may put in situ an appropriate maker-checker system to make sure that the account number information furnished by their customers is correct and free from errors. this might entail advising customers enjoying online / internet banking facilities to input the account number information quite once (with the primary time feed being masked as just in case of change of password requirements) or such other prescriptions. Customers submitting funds transfer requests at branches could also be required to write down down the account number information twice within the form .
Member banks shall take necessary steps to make awareness amongst their customers about the necessity for providing correct account number information while making payments through RTGS / NEFT / NECS / ECS Credit
The above notwithstanding, in cases where it's found that credit has been afforded to a wrong account, banks got to establish a strong , transparent and quick grievance redressal mechanism to reverse such credits and set right the error and / or return the transaction to the originating bank. This particularly must function very efficiently and pro-actively until such time customers are comfortable with the new arrangements.
In view of RBI guidelines, Bank as soon because it is found that the credit has been afforded to the incorrect account, should block the quantity. If the error of credit is thanks to Banks’ fault or on due verification it's found that it's thanks to incorrect account numbers then such credits are often reversed and remit to the remitting bank.
But in such cases, where the position of the recipient has been altered or he had acted already acted in straightness or the error is noticed after an inexpensive time it's preferable to dam the quantity, give notice to the customer and reverse the quantity after getting his consent.
If the customer is unwilling to oblige to return the cash he should be told that as per Sec 72 of Indian contract act he's sure to return the cash paid by mistake. ( unjust enrichment ). In cases where the customer refuses to cooperate with the remitter and therefore the bank has got to be told about the position to require further action legally.
As RBI has left it to individual banks to determine a strong grievance redressal mechanism to reverse such wrong credits, headquarters should begin with clear cut guidelines on the way to handle such requests from the sender banks/remitter.