BSNL Ordered to Pay Over ₹55 Lakh Compensation After Unauthorised Duplicate SIM Led to ₹87.7 Lakh Bank Fraud

The Karnataka High Court has directed Bharat Sanchar Nigam Limited (BSNL) to pay more than ₹55 lakh to a co-operative bank after a duplicate SIM card was issued without authorisation, leading to a cyber fraud.  

As per the Times of India report, the court awarded ₹50.50 lakh as compensation for the unrecovered loss, ₹5 lakh towards consequential damages and interest at 9% per annum from February 7, 2019. 

Unauthorised Transactions Totalled ₹87.7 Lakh 

The case involved Sri Basaveshwara Pattana Sahakara Bank Niyamitha, whose current account with Canara Bank was linked to a BSNL mobile number used for OTP-based internet banking authentication.  

Between February 6 and 7, 2019, seven unauthorised RTGS and NEFT transactions amounting to ₹87.7 lakh were processed after fraudsters gained access to OTPs through a duplicate SIM. 

The bank stated that it had not requested or authorised the issue of the duplicate SIM card. 

Court Points to Negligence in SIM Issuance 

The High Court observed that the duplicate SIM reaching a person other than the registered subscriber indicated lapses in the verification process.  

It noted that telecom service providers have a greater responsibility when handling mobile numbers linked to banking services and high-value financial transactions. 

The judgment also referred to disciplinary proceedings initiated against a BSNL employee involved in issuing the duplicate SIM, stating that the organisation could not avoid responsibility for actions carried out by its staff. 

Recovery and Compensation 

Of the total amount transferred, ₹30 lakh was reverse credited and another ₹7.12 lakh was recovered through police intervention, leaving the bank with an unrecovered loss of ₹50.50 lakh.  

The court rejected BSNL's argument that insurance claims and other recoveries reduced its liability, holding that insurance compensation does not remove responsibility arising from negligence. The petition challenging the compensation order was dismissed. 

Read More: Odisha Government Approves ₹3,793.33 Crore Investment Proposals; To Create Nearly 20,000 Jobs! 

Conclusion  

With the petition dismissed, BSNL has been directed to compensate the bank for its unrecovered losses, consequential damages and applicable interest arising from the 2019 fraud. 

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