Mumbai: In a significant move to protect digital payment users, the Reserve Bank of India (RBI) on Friday unveiled a new framework to compensate victims of online fraud. RBI Governor Sanjay Malhotra said affected customers would be eligible for compensation of up to ₹25,000, or 85% of the amount lost—whichever is lower—applicable to first-time fraud cases involving small-value digital transactions.
The compensation will be funded through the RBI’s Depositor Education Fund, with the central bank bearing 70% of the loss, while the concerned bank and the customer will share the remaining 30% equally. RBI data shows nearly 65% of cybercrime cases currently involve losses below ₹55,000.
Notably, even customers who shared OTPs will be considered for compensation in first-time cases, reflecting a consumer-friendly approach amid rising digital scams. The move aims to prevent financial hardship among ordinary users affected by cyber fraud.
Alongside the compensation framework, the RBI announced additional safeguards, including delayed credits for large transfers or payments to new beneficiaries, enhanced authentication for senior citizens, and stricter norms for recovery agents to curb harassment during debt collection.