- RBI introduces Rs 25,000 compensation for small-value fraud losses to protect customers
- New guidelines will target misselling, recovery agent conduct, and unauthorised transactions
- RBI plans discussion papers on digital payment safety for high-risk groups like senior citizens
The Reserve Bank of India on Friday announced a series of regulatory measures to strengthen customer protection, advance financial inclusion, and a compensation mechanism of Rs 25,000 for victims of small‑value fraudulent electronic transactions.
RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has also announced measures such as enhance the flow of credit and strengthening the Urban Cooperative Banks (UCBs), promote doing ease of business specially for NBFCs and deepen the financial markets.
A key highlight of the policy is RBI's decision to introduce a compensation mechanism in which customers will now be eligible to receive up to Rs 25,000 as compensation for losses arising from unauthorised small‑value transactions. This initiative is intended to boost public confidence in digital payments amid rising fraud cases.
As part of its broader customer‑protection agenda, the RBI also announced three upcoming guidelines aimed at curbing misselling, regulating the conduct of recovery agents, and further strengthening norms governing unauthorised electronic transactions to reduce vulnerabilities in the digital payments ecosystem.
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RBI said that they will publish discussion papers on possible measures to enhance safety of digital payment especially for high‑risk user groups, including senior citizens to support safer adoption of digital payments.
Elaborating more on the compensation, in a press conference, Shirish Chandra Murmu, Deputy Governor of the RBI, stated that new guidelines will soon be introduced to address issues related to mis-selling. He said the emphasis will be on product suitability, customer appropriateness, and explicit customer consent will form the core pillars of these forthcoming digital guidelines. He added that detailed rules will accompany the framework, adding that the compensation will be for just one-time.
RBI Governor Sanjay Malhotra further explained the intent behind the compensation framework. He assured that if a customer loses money in a small‑value fraudulent transaction, compensation will be provided with no questions asked, as long as the loss is genuine and not a result of malafide intent. He stressed that internal system checks will ensure this. Malhotra said the relatively small compensation limit was deliberate, designed to offer immediate relief and reassurance, especially to vulnerable or small customers for whom such losses can be deeply impactful.
This is the first monetary policy review after Finance Minister Nirmala Sitharaman announced the Budget for financial year 2026-27.
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