The Reserve Bank of India has brought in a cap on the customer liability at Rs 25,000 if they report unauthorized transactions within 7 working days. RBI said customers cannot 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 in view of the increase in the number of grievances relating to unauthorized transactions. The central bank said in a statement the systems and procedures in banks must be designed to make customers feel safe about carrying out electronic banking transactions. It has, however, given banks the freedom to determine customer liability if such a transaction is reported after 7 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. 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.