In a significant ruling, district consumer complaints redressal forum has held HDFC bank responsible for unauthorised fund transfer in an internet banking transaction.

In the order dated March 25, the forum directed the bank to pay a customer the whole amount which had been transferred from his HDFC bank account without his authorisation.

The forum, headed by M G Rahatgaokar, held that the bank failed to implement the guidelines issued by Reserve Bank of India, for net banking facility.

Nikhil Phutane, the complainant, has an account with HDFC's Santacruz branch here.

Qatar National Bank, where he works, transferred Rs 4,60,000 to his account in October 2008. However, Phutane found out in November that his bank balance was zero.

The entire amount had been transferred -- through net banking -- to the account of one Dinesh Shukla, at Lucknow.

According to Phutane, he never authorised HDFC to add Shukla's name to the list of "third party beneficiaries" on his online account.

A police complaint was lodged, and Shukla and four others, including two Nigerian nationals, were arrested, and Rs 70,500 were recovered from them.

Phutane demanded that the bank return him rest of the amount, as he was not at fault.

Since HDFC refused to pay him the balance amount, he filed complaint before the Consumer Forum.

The bank argued before the forum that either Phutane inadvertently had revealed his transaction password to someone, or the computer used by him had a virus.

It also argued that after request for fund transfer was received from his online account, an SMS and an email was sent to him, for confirming the request. Since no reply came, the funds were transferred.

But the forum held that bank failed to prove that such alert had been sent. Further, it held that simply because Phutane failed to respond to mail, the bank should not have proceeded with transfer.

The bank had failed to implement "National Electronic Fund Transfer (NEFT) guidelines, isssued by RBI," the forum held, asking it to pay Phutane the balance amount.

In addition, forum also asked the bank to pay Rs 35,000 to him, on account of "mental agony" and legal expenses.