RBI New Customer Fraud Guidelines: Reserve Bank of India Proposes Fraud Compensation, Curbs Mis-Selling
Accordingly, the draft revised instructions, including a framework for compensation in case of small-value fraudulent transactions, shall be issued shortly for public consultation, the RBI Governor said. He also said that the RBI is tightening rules to check banks and NBFCs from mis-selling financial products and services.
Mumbai, February 6: RBI Governor Sanjay Malhotra announced on Friday that the RBI is drawing up fresh rules on compensation for customers of banks in case of small-value fraudulent transactions. The extant instructions on limiting the liability of customers in unauthorised electronic banking transactions were issued in 2017, which deal with scenarios and timelines for zero or limited liability of a customer. In view of the rapid adoption of technology in the banking sector and payments systems, since the issuance of these instructions, the existing instructions have been reviewed.
Accordingly, the draft revised instructions, including a framework for compensation in case of small-value fraudulent transactions, shall be issued shortly for public consultation, the RBI Governor said. He also said that the RBI is tightening rules to check banks and NBFCs from mis-selling financial products and services. Mis-selling financial products and services by any bank or NBFC has significant consequences for both customers and the financial entity itself. RBI Repo Rate: Reserve Bank of India Leaves Policy Repo Rate Unchanged, Sticks to Neutral Policy Stance.
There is a felt need to ensure that third-party products and services that are being sold at the bank counters are suitable for customer needs and are commensurate with the risk appetite of individual clients. It has therefore been decided to issue comprehensive instructions to REs on advertising, marketing and sales of financial products and services. The draft instructions in this regard shall be issued shortly for public consultation, the RBI Governor said. He also said that the RBI has decided to review and harmonise all the extant conduct-related instructions on engagement of recovery agents and other aspects related to recovery of loans. Amazon Shares Slump 11% Despite Strong Q4 Sales, Layoffs; Investor Anxiety Grows Over USD 200 Billion AI, Robotics and Semiconductor Spending Plan.
Accordingly, the draft instructions in this regard shall be issued shortly for public consultation. Currently, different sets of instructions are applicable to different categories of Regulated Entities (REs), such as banks and NBFCs, with respect to the engagement of recovery agents and conduct-related aspects of loan recovery.
(The above story first appeared on LatestLY on Feb 06, 2026 12:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).