RBI Launches ₹25,000 Cover for Digital Fraud Victims in India — What It Means for Account Holders

• RBI proposes ₹25,000 compensation framework for small-value digital frauds to strengthen online payment safety.

• RBI Governor Sanjay Malhotra says new measures aim to protect customers amid rising digital payment risks.

• RBI also release three draft guidelines on mis-selling, loan recovery and customer liability in digital transactions.

The Reserve Bank of India (RBI) on Friday proposed a new framework to compensate customers for losses from small-value fraudulent digital transactions, signalling a stronger push to improve the safety of online payments. Under the proposal, customers may receive compensation of up to ₹25,000 if they suffer losses due to such frauds.

RBI Governor Sanjay Malhotra announced the move after the Monetary Policy Committee (MPC) meeting, stating that the central bank wants to strengthen customer protection as digital payments expand and the risk of unauthorised transactions rises.

“The RBI plans to compensate customers up to Rs 25,000 for small-value fraudulent transactions and issue draft guidelines on mis-selling, loan recovery and customer liability,” Sanjay Malhotra said.

Alongside the compensation proposal, the RBI plans to issue three draft guidelines focused on consumer rights. These guidelines will address mis-selling of financial products, the recovery of loans and the role of recovery agents and limits on customer liability in unauthorised electronic banking transactions.

Digital Payment Safety

The RBI also plans to publish a discussion paper on ways to make digital payments safer. This may include delaying some credits and adding extra checks for certain users such as senior citizens, to cut fraud and build trust in digital payments.

Separately, the RBI kept the repo rate unchanged, as expected. The decision came at a time of strong economic growth at home and lower global pressure after a recent trade deal eased worries over US tariffs.

The rate-setting panel voted to keep the repo rate unchanged at 5.25%, pausing after a string of earlier cuts. Since February 2025, the central bank has lowered interest rates by a total of 125 basis points, its most aggressive easing cycle since 2019.

The RBI had lowered rates by 25 basis points at its previous meeting in December to support growth while keeping inflation in check. Friday’s decision suggests the central bank now sees a need to balance stability with earlier stimulus measures.

Meanwhile, India’s economy is expected to grow 7.4% in the current financial year. For the next year, the government’s economic adviser sees growth in the range of 6.8% to 7.2%, even as global risks remain.