New Delhi: The Reserve Bank of India has released draft guidelines proposing a new compensation framework to protect customers affected by digital payment fraud. The proposed scheme aims to reimburse victims for a significant portion of their financial losses as cases of online fraud continue to rise with the rapid expansion of digital transactions.
Under the proposal, customers may receive compensation covering up to 85 percent of the amount lost in a fraudulent digital transaction. However, the total payout will be capped at Rs 25,000 per case.
According to the draft framework, the central bank would bear the larger share of the compensation. The Reserve Bank of India would cover 65 percent of the loss, while the remaining 20 percent would be paid by the customer’s bank. This shared responsibility is intended to strengthen consumer protection while encouraging financial institutions to improve fraud prevention measures.
The proposed scheme will initially be implemented for a period of one year. After this trial phase, authorities will review the contribution structure and evaluate the effectiveness of the framework before making further adjustments.
To qualify for compensation, customers will be required to report fraudulent transactions within five days of noticing the activity. Complaints must be registered through the national cybercrime reporting system or by contacting the official helpline number 1930, along with notifying their bank.
The central bank has also specified that individuals will be eligible to use the compensation facility only once during their lifetime. This condition is intended to encourage responsible digital transaction practices while still providing a safety net for genuine victims of fraud.
The new guidelines are designed to strengthen existing customer protection rules and shorten the time required to resolve complaints related to digital fraud. Faster processing and clearer procedures are expected to help victims recover part of their losses more efficiently.
If finalised, the compensation scheme is scheduled to come into effect from July 1. The proposal reflects growing efforts by regulators to strengthen trust in India’s rapidly expanding digital payments ecosystem.
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