RBI Introduces ₹25,000 Compensation for Digital Fraud Victims
The Reserve Bank of India (RBI) announced several new measures on Friday to protect bank customers and improve financial inclusion. A major update is a new compensation plan that offers up to ₹25,000 to victims of small-value digital fraud.
RBI Governor Sanjay Malhotra explained that the Monetary Policy Committee (MPC) also introduced steps to improve credit flow, strengthen Urban Cooperative Banks (UCBs), and make it easier for NBFCs to do business.
New Compensation for Small-Value Fraud
To build trust in digital payments, the RBI is launching a mechanism to pay back customers who lose money to unauthorized electronic transactions. Victims can now receive up to ₹25,000 for their losses. This move comes as a response to the rising number of digital fraud cases across the country.
Stricter Rules for Banks and Recovery Agents
As part of its plan to protect consumers, the RBI will soon release three new sets of guidelines. These rules focus on:
- Stopping “Mis-selling”: Preventing banks from selling products that aren’t right for the customer.
- Regulating Recovery Agents: Controlling the behavior and conduct of debt collectors.
- Securing Digital Payments: Strengthening rules around unauthorized transactions to make the payment system safer.
The RBI also plans to release research papers on how to make digital payments safer for “high-risk” groups, such as senior citizens.
How the Compensation Works
During a press conference, Deputy Governor Shirish Chandra Murmu clarified that the new guidelines will focus on three pillars:
- Product Suitability: Making sure the product fits the customer’s needs.
- Customer Appropriateness: Ensuring the service is right for the user.
- Explicit Consent: Requiring clear permission from the customer before a transaction.
It is important to note that this compensation is a one-time relief for each victim.
A “No Questions Asked” Approach
Governor Sanjay Malhotra emphasized that the goal is to provide fast relief. If a customer loses money in a small-value fraud, the compensation will be paid with “no questions asked,” provided the loss is genuine and not a result of illegal intent by the user.
Internal system checks will be used to verify claims. The Governor noted that the ₹25,000 limit was chosen specifically to help vulnerable or small-scale customers who are most affected by these losses.
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