How to restrict a Linux user to his home directory only when he SFTP in?

The following is at the end of my "/etc/ssh/sshd_config"...
Subsystem sftp internal-sftp

Match Group sftponly
    ChrootDirectory %h
    ForceCommand internal-sftp
    AllowTcpForwarding no

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I have a group called sftponly with gid 562.
I've added userabc to this group and the following is his entry in /etc/passwd...
userabc:x:527:562:User description goes here:/home/userabc:/bin/false
I've restarted sshd.
"/home" and "/home/userabc" is owned by root:root and permissions for both folder is 755/
Below is the output when I try to SFTP in to the server using userabc...
Status:	Connecting to xxx.xxx.xxx.xxx...
Response:	fzSftp started
Command:	open "userabc@xxx.xxx.xxx.xxx" 22
Command:	Pass: ********
Status:	Connected to xxx.xxx.xxx.xxx
Status:	Retrieving directory listing...
Command:	pwd
Response:	Current directory is: "/"
Command:	ls
Status:	Listing directory /
Error:	Unable to open .: permission denied

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May I know, what am I missing here? Thanks!
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killdurstAsked:
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woolmilkporcCommented:
Hi,

the user's home directory is relative to the chroot directory. That's because sshd changes the working directory to the user's home directory after the chroot.

So sshd tries to change to "/home/userabc/home/userabc", a directory which might not exist or have the wrong permissions on your machine. Maybe that's the cause of your issue.

OK, sftp should be able to "ls" the chroot directory, the one where sshd will change to when $HOME is not found under the chroot path nevertheless ...

Anyway, better create a directory /home/userabc/userabc with the low-level "userabc" directory being owned and writeable by userabc, then change the home directory in /etc/passwd to "/userabc" and change the chroot directory in sshd_config from "%h" to "/home/%u".

Alternatively, create a root-owned, only-root-writeable directory /home/sftpusers, make this the chroot directory and create user-owned directories corresponding to your usernames below it. The users' home directories should then become "/username".
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StampelCommented:
Thats right. Just be warned if it does not work be aware that it is not working on slightly old versions of OpenSSH
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