RBI plans to compensate up to ₹25,000 in online fraud losses 

RBI proposes compensation up to ₹25,000 for online fraud victims, simplifying recovery for small-value fraudulent transactions.

The Reserve Bank of India (RBI) has proposed to introduce a framework to compensate victims of online frauds up to ₹25,000 for losses incurred in small-value fraudulent transactions.

The draft guidelines will be issued soon. Both the victim and the bank will have skin in the game and both will bear 15% of the transaction value. The RBI will pay the remaining from its Depositor Education and Awareness Fund. 

Also read: ₹1.40 per ₹1 lakh lost to fraud as India’s digital payments surge, says RBI

For example, if someone has lost ₹50,000 in a fraudulent transaction, 85% of that amount (₹42,500) or ₹25,000, whichever is less, will be paid by the RBI. 

In case someone lost ₹20,000, 85% of that amount (₹17,000) or ₹25,000 which ever is lower, will be paid. In this case the victim gets ₹17,000.

For such small-value fraudulent transactions, which constitute 65% of online frauds, no questions will be asked of the victim if she/he has even given an OTP.