RBI to compensate online fraud victims up to ₹25,000; guidelines soon
RBI to compensate online fraud victims up to ₹25,000; guidelines soon
RBI proposes a framework to reimburse small-value online fraud losses up to ₹25,000, sharing costs with banks and customers, with guidelines expected soon.
The Reserve Bank of India is moving to shield customers from small-value online fraud by proposing a framework that would compensate victims up to ₹25,000. The plan, which is to be laid out in draft guidelines shortly, assigns 15% of the transaction value to both the victim and the bank, with the RBI covering the remaining amount from the Depositor Education and Awareness Fund. The aim is to curb the most common, lower-value scams that account for a large chunk of online fraud cases.
Under the proposed framework, the RBI would pay up to ₹25,000 or 85% of the loss, whichever is lower. For example, if ₹50,000 is lost, 85% of the amount is ₹42,500, but the maximum RBI payout would be ₹25,000, and the balance would be borne by the victim and the bank as per the 15% contribution rule. If ₹20,000 is lost, RBI would pay ₹17,000 (85% of ₹20,000), which again remains within the ₹25,000 cap. The Governor emphasized that compensation is available for unintended losses and that claims will be checked to prevent malfeasance.
The RBI notes that small-value frauds, though low in individual value, are high in number, constituting about 65% of online frauds. The central bank also highlighted the Depositor Education and Awareness Fund, which has substantial unused resources—₹85,000 crore in unclaimed deposits—and could be tapped to support these reimbursements, subject to governance and safeguards. The Bank will soon issue a draft revised instruction for public consultation, signaling a move toward clearer accountability for both banks and customers in fraud incidents.
