RBI Proposes Compensation Framework for Small-Value Digital Payment Frauds

The Reserve Bank of India (RBI) has proposed a new framework to compensate customers for small-value digital payment frauds, offering up to 85% of losses or ₹25,000 for amounts up to ₹50,000 if reported promptly. This move aims to enhance consumer protection and trust amid rising cyber fraud incidents. Experts welcome the proposal but emphasize that its success depends on effective implementation and clear definitions of customer and bank negligence. The draft is expected to take effect by July 2026 after consultations.