Small fraud: RBI for relief to customers within 5 days

The move comes against the backdrop of a rising number of digital fraud cases, with customers increasingly losing hard-earned savings to such incidents.

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More than two-thirds of fraud cases are of small value, though they account for about 15 per cent of the total fraud value.

The draft on limiting customer liability in fraudulent digital transactions proposes that the norms will come into effect from July 1, 2026.

“The digital payments and banking landscape has evolved considerably since the issuance of the existing instructions on limiting customer liability in unauthorised electronic banking transactions in 2017,” the RBI said. The draft makes it mandatory for banks to send instant SMS alerts to customers for all electronic banking transactions of value more than ₹500.

Following a review, the central bank said it has decided to issue revised instructions to banks that expand the scope of the existing framework to cover additional categories of fraudulent electronic banking transactions, reduce the time taken by banks to process related complaints, and introduce a compensation mechanism for small-value fraudulent electronic transactions.

RBI has invited comments from stakeholders by April 6.