RBI readies framework of ₹25,000 compensation against digital frauds:Top bank seeks public suggestions till 6 April

The Reserve Bank of India (RBI) has issued a new draft framework ‘Customer Liability in Digital Transactions’ to protect customers from fraud in digital transactions. Under this, if a customer experiences digital fraud and reports it immediately, they can receive compensation of up to ₹25,000. The new rules aim to reduce the time taken in resolving bank complaints and create a better compensation mechanism for small-value frauds. RBI has sought suggestions from the public and stakeholders on this draft until April 6, 2026. After this, the government will implement it. Up to 85% of fraud amount can be recovered
According to the proposed rules, if digital fraud of up to ₹50,000 occurs and the customer reports it on time, they can get back 85% of the loss or ₹25,000 (whichever is less). RBI believes that this will not only increase customer confidence, but will also make the digital payment ecosystem more secure. This compensation mechanism will remain effective for one year from the date of implementation, after which it will be reviewed based on its experiences. Understand through examples how much money will be refunded in case of fraud First situation: If there is a fraud of ₹10,000, then 85% ie ₹8,500 will be refunded. Second situation: If there is a fraud of ₹40,000, then 85% of the amount of up to ₹34,000, but since the limit is ₹25,000, only ₹25,000 will be refunded. Why was there a need to change the 2017 rules?
RBI explained that the current rules were issued in 2017. In the last 7-8 years, digital banking and payment methods have completely changed. Now besides unauthorized transactions, many new types of electronic frauds are emerging. Keeping this in mind, it was decided to expand the scope of old rules so that all types of digital fraud can be covered under it. Complaint cases will be resolved quickly, banks’ accountability will increase
A key objective of the new draft is to reduce the time taken by banks to process complaints. It is often seen that customers have to wait for months for refunds after fraud occurs. RBI wants banks and financial institutions to speed up this process. In future, RBI will also consider reducing its share in compensation payments and increasing banks’ share. General public can give suggestions till April 6
RBI has uploaded this draft on its website. Regulated entities (Banks/NBFCs) and general public can send their feedback via email. After receiving feedback, the rules will be finalized.