RBI’s digital scam compensation pilot | Explained
The Reserve Bank of India has introduced a pilot program to reimburse customers for losses incurred through specific types of digital fraud, such as 'digital arrests' or stolen OTPs. The rules, effective January 2027, exclude cases where customers ignore fraud warnings.
Why it matters
This policy shift aims to increase consumer confidence in digital banking while placing responsibility on users to adhere to security protocols.
The Reserve Bank of India on Wednesday (June 24, 2026) issued fresh rules to protect customers from scam transactions where they lose money to fraudsters and cyberattacks. These directions amend the RBI’s 2017 circular on “Limiting Liability of Customers in Unauthorised Electronic Banking Transactions”. That previous framework only left banks liable to compensate scammed customers if transactions were not even authorised by customers, such as in a successful hacking incident.
The article provides a factual explanation of regulatory changes without taking a stance on the policy's efficacy.
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