After the recent indemnity clause on technical failure by the Bank of Bhutan (BoB) created a huge hue and cry among the consumers, the bank issued an official clarification stating that the indemnity was solely intended to protect the bank against claims by clients for losses incurred due to transfers and recharges made to the wrong accounts or mobile numbers by the clients themselves while using the mBoB application.
“Technically, it is impossible for an account to be wrongly credited or debited. This can only occur due to human error and if the error is done by an employee of the bank, the bank has always and will always reimburse the client first and take the loss if necessary. However, if the client suffers a loss due to his/her own mistake (such as transfer/recharge to wrong account/mobile number), the bank cannot be held liable but the bank will definitely assist and make all attempts to recover the funds,” read the statement.
According to the bank, technical failure meant that if the customer is in urgent need to perform transaction through mBoB but if mBoB is unavailable due to scheduled maintenance, connectivity issue and power blackout, customer cannot hold BoB accountable for unavailability of mBoB services during such time.
Justifying the reason for coming up with an indemnity, the bank said, “With clients being empowered to conduct many financial transactions themselves through technology, the controls of initiating a transaction has moved to the client from the bank, and hence the bank needs to indemnify itself against any losses arising from such transactions, as in the case of transactions done using mBoB.”
Further, the bank said that the indemnity contract which specifies the term ‘‘You agree to indemnify & hold BoB harmless against any direct or indirect loss arising due to technical failure, having wrongly transferred/recharged to the unintended beneficiary”, has to be broadly interpreted in good faith- the words have to be understood in the real sense and usage and it cannot be interpreted in restrictive form where out of usage the liability is imposed on the customers without taking into consideration the scope of any redressal.
However, after the bank removed the particular clause on the technical failure which caused confusion and panic among the general public, the Office of the Consumer Office expressed their gratitude to the bank formally though a letter, and also requested the bank to review if there are other unfair indemnity clauses that are not in line with the consumer rights and rectify accordingly.