New Delhi [India], March 7 : Reserve Bank of India (RBI) has issued draft Amendment Directions for 'Review of Framework of Limiting Customer Liability in Digital Transactions'.
Under the proposed framework, customers could receive up to 85 per cent of the loss or Rs 25,000 (whichever is lower) for frauds up to Rs 50,000 if reported promptly.
The proposed revision is aimed at enhancing the scope of existing instructions on limiting liability of customers in unauthorised electronic banking transactions to cover other categories of fraudulent electronic banking transactions, reduce the time taken by banks to process complaints related to fraudulent electronic banking transactions, and introduce a compensation mechanism for small value fraudulent electronic banking transactions.
The digital payment and banking landscape has evolved considerably since the issuance of the existing instructions on limiting liability of customers in unauthorized electronic banking transactions in 2017.
Upon review, it has been decided to issue revised instructions to banks.
The compensation mechanism proposed to be introduced under these Amendment Directions will be in force for one year from the effective date of these Directions.
"This will be reviewed on the basis of the experience gained with an objective of enhancing the share of the banks and reducing / eliminating the share of RBI in the compensation paid to the victims," RBI said.
The comments or feedback on the draft Amendment Directions may be submitted by the regulated entities and members of the public or other stakeholders on or before April 6, 2026, via email and the RBI website.
In the latest monetary policy meeting in early February, Reserve Bank of India Governor Sanjay Malhotra announced a set of measures aimed at enhancing customer protection, advancing financial inclusion, enhance flow of credit, strengthening urban cooperative banks (UCBs), promoting ease of doing business for NBFCs, and deepening financial markets.
Among others, it was proposed to introduce a framework to compensate customers up to Rs 25,000 for losses incurred in small-value fraudulent transactions.
In the monetary policy statement, the governor had announced that the RBI will also publish a discussion paper on potential measures to enhance the security of digital payments.
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