RBI Announces ₹25,000 Compensation for Digital Fraud Victims, Strengthens Customer Protection
The Reserve Bank of India (RBI) on Friday announced a fresh set of measures aimed at strengthening customer protection against digital fraud, including compensation of up to ₹25,000 for losses arising from small-value digital frauds.
Speaking at the post-policy press conference following the Monetary Policy Committee (MPC) meeting on February 6, RBI Governor Sanjay Malhotra said the central bank would roll out a broader framework to enhance customer safeguards, improve credit flow, and deepen India’s financial markets.
RBI to Issue Draft Guidelines to Empower Customers
As part of its customer protection push, the RBI will issue three draft guidelines focusing on:
- Mis-selling of financial products
- Loan recovery practices and engagement of recovery agents
- Limiting customer liability in unauthorised electronic banking transactions
In addition, the RBI proposed a compensation framework of up to ₹25,000 for customers affected by small-value digital frauds.
The central bank will also release a discussion paper on strengthening digital payment safety, which may include measures such as lagged credits and additional authentication, especially for vulnerable groups like senior citizens.
Financial Inclusion and Credit Flow Measures
Governor Malhotra said the RBI has completed a comprehensive review of key financial inclusion initiatives, including:
- Lead Bank Scheme (LBS)
- Kisan Credit Card (KCC) Scheme
- Business Correspondent (BC) Model
Draft revised guidelines for these schemes will be issued shortly. The RBI will also launch a unified reporting portal to improve the management and monitoring of LBS data.
To support MSMEs, the RBI proposed to raise the limit for collateral-free loans from ₹10 lakh to ₹20 lakh. Banks may also be allowed to lend to Real Estate Investment Trusts (REITs), subject to prudential safeguards, to boost funding for the real estate sector.
RBI Unveils Four Measures to Strengthen Urban Cooperative Banks
To strengthen Urban Cooperative Banks (UCBs), the RBI announced four key measures:
Raising financial limits on unsecured loans
Increasing loan limits for nominal members
Removing tenor and moratorium-related conditions on housing loans for Tier III and Tier IV UCBs
Launching Mission SAKSHAM (Sahakari Bank Kshamta Nirman) to enhance managerial and technical capacity
Under Mission SAKSHAM, over 1.4 lakh UCB personnel will be trained across the country.
Compliance Relief for NBFCs
To promote ease of doing business, the RBI proposed:
Exempting NBFCs with no public funds and no customer interface, and asset size up to ₹1,000 crore, from mandatory registration
Removing the requirement for certain NBFCs to seek prior approval to open more than 1,000 branches
Steps to Deepen Financial Markets
On financial market reforms, the RBI said revised regulations on External Commercial Borrowings (ECBs) will be notified soon. The central bank also proposed removing the ₹2.5 lakh crore cap on investments under the Voluntary Retention Route (VRR).
Following the Union Budget 2026, the RBI plans to introduce:
A regulatory framework for derivatives on corporate bond indices
Guidelines for total return swaps on corporate bonds
Revised norms for Authorised Dealer banks and standalone primary dealers, allowing greater flexibility in foreign exchange transactions
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