Compensation for victims of digital fraud, RBI and banks to jointly bear payout

The Reserve Bank of India (RBI) on Friday proposed a new compensation framework for small-value fraudulent electronic banking transactions that would require the central bank, the customer’s bank and the beneficiary’s bank to jointly bear the payout, as part of efforts to strengthen customer protection amid rising digital banking frauds.

Under the draft rules released by the RBI, compensation to customers will be capped at the lower of 85 per cent of the net loss amount (after adjusting for any recoveries made) or ₹25,000 in cases where the gross loss from a fraudulent electronic transaction is up to ₹50,000.