Mumbai: The Reserve Bank of India (RBI) plans to compensate victims up to Rs 25,000 per case for small-value fraudulent transactions, even if they shared a one-time password (OTP), covering nearly 65 per cent of frauds under Rs 50,000.
“It is proposed to introduce a framework to compensate customers up to Rs 25,000 for loss incurred in small-value fraudulent transactions,” RBI Governor Sanjay Malhotra said. “As long as they are defrauded, whether on their own accord or anyone’s accord, no questions asked, and Rs 25,000 or 85 per cent (of the loss amount)…we will compensate them as long as it is unintended and they lost that money.”
Customers can claim this once in their lifetime, funded from surplus income of the Deposit Education and Awareness Fund, including unclaimed deposits, Deputy Governor Swaminathan J confirmed. For larger amounts, RBI will cover 70 per cent, with the rest shared between customer and bank.
RBI announced three draft guidelines for consultation: tackling mis-selling of financial products for transparency; regulating loan recovery agents to curb harassment; and limiting customer liability in unauthorised electronic transactions. A discussion paper on digital payment safety will explore lagged credits and extra authentications, especially for seniors.
These steps aim to build trust, enhance security, and promote responsible banking amid rising digital frauds.