RBI proposes to compensate customers up to ₹25,000 loss due to fraud

RBI plans to compensate customers up to ₹25,000 for losses from small-value fraud, enhancing digital payment safety measures.

Reserve Bank Governor Sanjay Malhotra on Friday (February 6, 2026) announced a new framework to compensate customers up to an amount of ₹25,000 for loss incurred in small-value fraudulent transactions.

Announcing the last bi-monthly policy for the current financial year, Mr. Malhotra said, "we will also publish a discussion paper on possible measures to enhance the safety of digital payments. Such measures may include lagged credits and additional authentication for specific class of users like senior citizens."

For customer protection, he said, RBI will issue three draft guidelines: one, relating to mis-selling; two, regarding recovery of loans and engagement of recovery agents; and three, on limiting liability of customers in un-authorised electronic banking transactions.

"It is also proposed to introduce a framework to compensate customers up to an amount of ₹25,000 for loss incurred in small-value fraudulent transactions," he said.

The extant instructions on limiting the liability of customers in unauthorised electronic banking transactions were issued in 2017, which deal with scenarios and timelines for zero/limited liability of a customer.

In view of the rapid adoption of technology in the banking sector and payments systems, since issuance of these instructions, the existing instructions have been reviewed, he said.