RBI Introduces Compensation for Small Value Fraud Victims: Customers Eligible for Up to Rs 25,000 in Losses

In a significant move to protect bank customers from small value financial fraud, the Reserve Bank of India (RBI) has announced a new compensation policy. Under this policy, victims of small value fraudulent transactions can receive compensation of up to Rs 25,000. The decision was made by RBI Governor Sanjay Malhotra during the 59th meeting of the Monetary Policy Committee (MPC). The committee also voted to keep the policy repo rate unchanged at 5.25 per cent. This compensation framework aims to safeguard customers from financial losses incurred due to unauthorized fraudulent transactions. Rahul Sharma, CFO of BLS E-Services, expressed support for the initiative and emphasized the importance of collaboration with banking partners to implement these safeguards. Additionally, Santanu Sengupta, Global Banking & Board Leader, commended RBI's proposal, stating that it signifies a crucial step in strengthening trust in the digital financial ecosystem. The RBI also announced plans to publish a discussion paper on measures to enhance the safety of digital payments, including additional authentication for specific user groups. Furthermore, the RBI will issue draft revised guidelines for the Lead Bank Scheme, Kisan Credit Card Scheme, and Business Correspondent Model, along with launching a unified reporting portal for better management of LBS data.