RBI Proposes Zero Liability for Customers in Fraudulent Digital Transactions
The Reserve Bank of India (RBI) has proposed draft guidelines to protect customers from fraudulent digital banking transactions stemming from lender negligence.
- Zero Liability: Customers bear no liability, with full transaction reversal, if fraud results from bank deficiencies.
- Effective Date: The rules, once finalized, apply to transactions on/after July 1, 2026.
- Third-Party Breaches: Banks fully responsible for reversals if customers report within five days of third-party breach.
- Compensation: Limited compensation offered to victims for smaller fraud, up to 85% or ₹25,000.
- Burden of Proof: Banks must prove customer negligence if denying claims.
