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RBI underscored its push towards stronger customer protection, announcing key measures offering relief to victims of small-value frauds
RBI Compensation (Representative Image)
The Reserve Bank of India has underscored its push towards stronger customer protection, announcing key measures offering relief to victims of small-value frauds.
The central bank revealed a new compensation framework for small frauds, noting that nearly 65% of fraud cases involve amounts below Rs 50,000.
“We are bringing out a framework for compensation for small frauds. We have observed that while in value they are small, in terms of numbers about 65% of frauds are below Rs 50,000. So long as they are defrauded, they are not liable — no questions asked — up to Rs 25,000. There are checks in the system to ensure it is not malafide. There is skin in the game for the customer at 15%, and skin in the game for banks at 15%. The remaining amount will be provided by the Reserve Bank. The amount is very small, but for small customers it means a lot. This is a way of providing immediate relief and solace,” the RBI said.
Under the proposed mechanism, customers will not be held liable—“no questions asked”—for losses up to Rs 25,000, subject to safeguards against misuse. The framework introduces shared responsibility, with customers and banks bearing 15% each, while the remaining amount will be compensated by the RBI, offering immediate relief to small depositors.
One-Time Relief, Not a Repeat Benefit
The Reserve Bank of India (RBI) has clarified that compensation for fraud will be available to a customer only once, underscoring that the framework is meant to provide immediate relief rather than repeated protection. The central bank stressed that while it aims to offer solace to victims of small-value frauds, customers are expected to remain vigilant, act responsibly, and learn from past mistakes, as repeated lapses or negligence will not qualify for compensation under the proposed mechanism.
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February 06, 2026, 12:57 IST
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