RBI Introduces Compensation Framework for Fraudulent Transactions

RBI Governor Sanjay Malhotra announced a framework compensating customers up to Rs 25,000 for losses in small-value fraudulent transactions. A discussion paper on digital payments safety and draft guidelines on mis-selling, loan recovery, and unauthorized transactions will be released soon. Mission Saksham aims to enhance UCBs' capacities.

The Reserve Bank of India (RBI) is rolling out new measures to enhance customer security in banking transactions. Governor Sanjay Malhotra announced a framework designed to compensate customers for losses incurred in small-value fraudulent transactions up to Rs 25,000.

Malhotra revealed plans for a discussion paper on bolstering digital payment safety, specifically for vulnerable groups such as senior citizens, potentially through lagged credits and additional authentication steps. The RBI also plans to release draft guidelines tackling issues like mis-selling, recovery of loans, and liability limitations in unauthorized transactions.

Aiming to boost the Urban Cooperative Banks (UCBs), Mission Saksham was announced to develop skills and competencies through extensive training programs. The mission seeks to empower UCBs with the necessary capabilities to foster financial inclusion and ensure operational resilience.

(With inputs from agencies.)