KOLKATA: In a major step to protect customers from large financial losses on account of frauds, Reserve Bank of India has capped the customer liability at Rs 25,000 if they report unauthorised transactions within seven working days. RBI said customers can’t be made liable at all if they notify the bank within three working days of the transaction.These rules will be applicable for third party breach -- where the deficiency lies neither with the bank nor with the customer but lies elsewhere in the system.The banking regulator has revised the guidelines on customer liability given the recent surge in grievances relating to unauthorised transactions.“The systems and procedures in banks must be designed to make customers feel safe about carrying out electronic banking transactions,” it said.It has however given banks the freedom to determine customer liability if such transaction is reported after seven working days. The RBI has placed the onus of informing about the fraud on the customers, but the burden of proving it lies with the bank.“The longer the time taken to notify the bank, the higher will be the risk of loss to the bank/ customer.”Banks will have to shoulder the burden for losses due to contributory fraud and negligence on the part of the bank. For such cases, it will not make a difference whether or not the transaction is reported by the customer.However, in case of negligence such as sharing payment credentials, customers will have to bear the entire loss until they report the transaction to the bank. Any loss occurring after the reporting shall be borne by the bank.The regulator has also made owning a mobile phone mandatory for doing electronic banking transactions. “Banks must ask their customers to mandatorily register for SMS alerts and wherever available register for e-mail alerts,” it said, directing banks not to offer electronic banking facility to customers who do not provide mobile numbers to the bank.