RBI Amends Rules for Scam Compensation, Expands Customer Protection
The Reserve Bank of India (RBI) has issued new rules to protect customers from scam transactions, amending its 2017 circular. Effective January 1, 2027, the revised framework expands compensation eligibility to include fraud caused by coercion, stolen credentials, or negligence by a bank/third-party, not just unauthorized transactions. Customers can claim up to ₹25,000 for losses up to ₹50,000, once in a lifetime, with 85% paid by RBI and the rest by banks. The reporting timeline for third-party hacks has been extended to five days. The changes aim to address sophisticated fraud attempts and acknowledge customer vulnerability, though the framework does not explicitly cover scams above ₹50,000.
Key Points
- RBI has amended rules for scam compensation, expanding customer protection for fraudulent electronic banking transactions (EBTs).
- The new rules cover fraud due to coercion, stolen credentials, or bank/third-party negligence, effective January 1, 2027.
- Customers can claim up to ₹25,000 compensation for losses up to ₹50,000, with 85% paid by RBI and the remainder by banks.
- The reporting timeline for third-party hacks has been extended from three to five calendar days.
- The framework aims to address sophisticated fraud and customer vulnerability, but does not explicitly cover losses above ₹50,000.
Exam Facts
- RBI's new rules are effective from January 1, 2027.
- Compensation limit: up to ₹25,000 for losses up to ₹50,000.
- Reporting timeline for third-party hacks: five calendar days.
- The cybercrime helpline is 1930.
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