RBI Digital Banking Fraud Safeguards Proposed

Mumbai, Mar 6 (PTI) The Reserve Bank of India on Friday issued draft amendment directions to strengthen the framework governing customer liability in digital transactions, as it seeks to widen protection for users and speed up resolution of complaints related to fraudulent electronic banking transactions.

The central bank has asked stakeholders and members of public to submit feedback or suggestion on the draft guidelines by April 6, 2026.

The draft amendment directions have been issued with respect to the announcement made in the February monetary policy by the central bank.

The central bank said the digital payment and banking ecosystem has evolved significantly since the existing rules on limiting customer liability in unauthorised electronic banking transactions were introduced in 2017.


Following a review, the RBI has proposed revised instructions that would expand the scope of the framework to cover additional categories of fraudulent electronic banking transactions.

Under the draft amendments, banks will also be required to reduce the time taken to process customer complaints relating to fraudulent electronic banking transactions.

The proposals further introduce a compensation mechanism for small-value fraudulent transactions, aimed at providing quicker relief to affected customers.

According to the RBI, the proposed compensation mechanism will remain in force for one year from the effective date of the directions.

The arrangement will subsequently be reviewed based on the experience gained, with the objective of increasing the share of compensation borne by banks while reducing or eliminating the share contributed by the central bank.