Rs 25,000 compensation for small-value digital frauds? Here's what RBI governor Sanjay Malhotra said

RBI data showed that banks reported 13,469 fraud cases related to card and internet-based transactions in 2024–25, involving losses of Rs 520 crore

• RBI to compensate victims of small online frauds up to Rs 25,000
• Draft guidelines on mis-selling, loan recovery, and customer liability announced
• Discussion paper to propose stronger digital payment security measures

Did our AI summary help?

Reserve Bank of India governor Sanjay Malhotra on February 6 said the central bank is introducing new rules under which a compensation of Rs 25,000 will be paid to the victims of small-value online frauds.

“Introducing a framework to compensate customers up to an amount of Rs 25,000 for losses incurred in fraudulent transactions,” the governor said during February policy rate announcement.

The central bank governor noted that majority of the digital frauds are worth less than Rs 55,000.

"There is a framework which we will be taking out for compensation of small frauds because we have observed while in value, they constitute small proportion, but in numbers 65 percent have less than Rs 55,000 in terms of amount," Malhotra noted in his post-MPC press briefing.

The announcement was among a number of measures the central bank revealed for better customer protection and digital payments safety.

RBI MPC 2026: Central bank keeps repo rate unchanged at 5.25%, maintains stance at neutral

Malhotra listed three draft guidelines – mis-selling, recovery of loans and limiting liability of customers on unauthorised electronic banking transactions- for online payments safety.

The central bank chief pointed out that a discussion paper will be published soon to “enhance safety of payments”. “Such measures may include lacked credit, and additional authentication for specific classes of users like senior citizens,” he added.

In addition, the regulator will release a discussion paper proposing measures to strengthen digital payment security, including the introduction of “lagged credits” and enhanced authentication norms for senior citizens.

"There is a felt need to ensure that third party products and services that are being sold at the bank counters are suitable to customer needs and are commensurate with the risk appetite of individual clients," the central bank said.

Draft guidelines on customer liability in cases of electronic banking fraud will be issued shortly, the governor said in his monetary policy address. The framework will reassess existing safeguards governing customer responsibility in digital fraud cases, the central bank said in a statement.

Track all the latest updates on RBI MPC's February policy decision

Highlighting the risks accompanying the rapid expansion of digital payments, the RBI noted that the past decade has seen a rise in increasingly sophisticated frauds targeting unsuspecting customers.

RBI data showed that banks reported 13,469 fraud cases related to card and internet-based transactions in 2024–25, involving losses of Rs 520 crore, compared with 29,080 cases and losses of Rs 1,457 crore in the previous financial year.