Don’t be afraid of digital fraud! compensation to aggrieved consumers; RBI’s big proposal

• There has also been a huge increase in the incidence of online fraud
• Compensation can be up to 85 percent of the total loss
• When can the new proposal be implemented?

RBI Digital Banking Fraud Compensation: Although banking transactions have become easier in today’s digital age, the incidence of online fraud has also increased significantly. Often ordinary citizens lose their hard earned money to cyber criminals. The Reserve Bank of India (RBI) has come up with a very important and historic proposal to provide major relief to such aggrieved customers. According to the proposal, there will be a fixed amount of financial compensation to victims of digital banking fraud of small amounts. This decision of the Reserve Bank will create a sense of security among crores of customers doing digital transactions.

Planning by RBI

According to the new scheme introduced by the RBI, if a person is subjected to digital fraud, he can get compensation up to 85 percent of the total loss. However, the government has fixed a maximum limit of Rs 25,000 for this compensation. Notably, this compensation will be given only once in a lifetime to the concerned person. This means that if a person is a frequent victim of digital fraud, he may not get this help every time. The RBI has released a revised draft in this regard on March 6, and is currently re-examining the framework of consumer responsibility in digital transactions. RBI Governor Sanjay Malhotra had also discussed this issue in the February 6 credit policy meeting.

When can the new proposal be implemented?

As far as the technical aspects of this proposal are concerned, the compensation amount is planned to be divided. If a customer’s loss is less than Rs 29,412 and he gets 85 per cent compensation, 65 per cent of it will be borne by the RBI itself. The remaining 10 percent each has to be paid by the customer’s bank and the bank to which the money has gone (beneficiary bank). If the amount of fraud is between Rs 29,412 and Rs 50,000, the maximum compensation will remain Rs 25,000, of which the RBI’s share will be Rs 19,118. This will in some way create pressure on banks to tighten cyber security.

How to get compensation?

These new rules are likely to be applicable for electronic banking transactions on or after July 1, 2026. At present, this is only a draft and RBI has sought public opinions and suggestions on this. Any citizen can submit their written comments on the proposal till 6 April 2026. RBI’s move towards securing digital transactions will be a big safety net for the common middle class consumer, which will help offset some of the financial losses due to technological fraud.