Kamal Ghorui
The Reserve Bank of India (RBI) has proposed changes to its framework on customer liability in digital banking frauds, aiming to widen protection for users and ensure quicker resolution of complaints related to unauthorised electronic transactions.The central bank on Friday issued draft amendment directions and invited comments from stakeholders and members of the public by April 6, 2026.The move follows the announcement made during the February monetary policy, where the RBI had indicated that it would review and update the existing framework governing customer liability in digital transactions.According to the central bank, the digital payments and banking ecosystem has evolved significantly since the current rules were introduced in 2017, prompting the need to revise the guidelines.Under the proposed amendments, the scope of the framework will be expanded to cover additional categories of fraudulent electronic banking transactions.Banks will also be required to reduce the time taken to process complaints related to fraudulent digital transactions, with the aim of improving the grievance redressal mechanism for customers.The draft rules further propose a compensation mechanism for small-value fraudulent transactions, designed to provide faster financial relief to affected users.The RBI said the compensation arrangement would remain operational for one year from the date the new directions come into force.The mechanism will subsequently be reviewed based on the experience gained, with the objective of increasing the share of compensation borne by banks while reducing or eliminating the portion contributed by the central bank.
