SME Times News Bureau | 28 Jan, 2012

Banks are responsible for any fake notes dispensed by their automatic teller machines (ATMs) and should compensate customers for the loss when fraudsters withdraw money from their accounts using stolen data.

This was the view that emerged at a seminar on security of banking operations held here Friday.

"Banks cannot wash off their hands on the issue of fake notes dispensed by their ATMs and they are liable to compensate their customers. The customers should lodge a police complaint immediately on coming to know about the fake notes from an ATM," S.N. Ravichandran, joint secretary, Cyber Society of India, said.

While it is common to hear complaints of bank customers getting fake notes from ATMs, banks conveniently wash their hands off, saying that the cash is filled in the machines by third party agencies.

"The police should book the chief executive of the bank as well as that of the third party agency that refills the machine with cash. If that happens, fake currency in ATMs would vanish," Ravichandran said, adding that banks should not issue ATM cards indiscriminately.

Reserve Bank of India executive director G. Gopalakrishna said the central bank had told the banks not to circulate notes obtained from the currency chest immediately.