Daily
250 words
7/10
Rating

30 June 2026

RBI scam compensation rules

This is a specific regulatory framework introduced by the RBI to address digital banking fraud, directly relating to consumer protection, financial governance, and cyber security.

2 min read 2 questions 2 prelims

Notes

  • RBI introduced new rules to protect customers from fraudulent electronic banking transactions (EBTs), effective from January 1, 2027, for a one-year pilot period.
  • The framework amends the 2017 circular on 'Limiting Liability of Customers in Unauthorised Electronic Banking Transactions'.
  • Fraudulent EBTs are defined as transactions executed by third parties using stolen credentials or those executed by customers under coercion/duress.
  • Compensation is applicable for scams like 'digital arrests' and fraudulent OTP theft; however, transactions where a customer ignores fraud warnings are ineligible.
  • Customers must report losses to the cybercrime helpline (1930) within five calendar days to be eligible for compensation.
  • Compensation structure: For losses up to ₹50,000, victims can claim 85% of the amount, capped at ₹25,000, available only once in a lifetime.
  • Funding for compensation: RBI covers approximately 75%, with the remaining 25% split between the customer's bank and the beneficiary bank.
  • Negligence criteria: Failure to update contact details (phone/email) with the bank is considered negligence, potentially disqualifying a customer from liability waivers.
  • Complaint settlement timelines are set between 45 and 60 days, with the latter applying to international transactions.
  • The framework excludes scams exceeding ₹50,000 from the compensation mechanism.

Questions

  1. Critically analyze the RBI's new framework for compensating victims of fraudulent electronic banking transactions. How does this policy balance consumer protection with the principle of individual accountability in digital banking? 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. The rise of sophisticated cyber-fraud and social engineering attacks poses a significant challenge to financial inclusion and public trust in digital payment systems. Discuss the role of regulatory bodies in mitigating these risks and evaluate the effectiveness of the proposed compensation mechanisms in addressing the vulnerability of retail banking customers. 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. Under the new RBI rules for scam compensation effective from 2027, what is the maximum lifetime compensation a victim can receive for a fraudulent electronic banking transaction?

  2. According to the RBI's updated framework, which of the following scenarios would likely disqualify a customer from receiving compensation for a fraudulent transaction?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-06-30/rbi-scam-compensation-rules