New RBI Rules: Get Up to ₹25,000 Back if You’re Tricked by Digital Fraud
Online scams and pushy bank sales can make managing your money feel like walking through a minefield. However, the Reserve Bank of India (RBI) is introducing a major update to consumer protection rules to make banking safer and fairer for everyone.
A Safety Net for Digital Fraud
The most significant change is a new compensation plan for victims of small-value digital fraud. If you lose money to an online scam, the RBI proposes that you can be compensated for up to ₹25,000. In a major shift, this protection even covers people who accidentally shared their OTP or One-Time Password, which we know is a common mistake that previously left victims with no way to recover their funds.
Under this ‘once-in-a-lifetime’ benefit, you could be reimbursed for 85% of your loss, capped at ₹25,000. For first-time victims, the RBI intends to cover 70% of the loss, while the bank and the customer each bear 15%. This recognises that while we should all stay vigilant, the rapid pace of technology can sometimes lead to honest mistakes.
Stopping “Mis-selling”
Have you ever felt pressured into buying an insurance policy or an investment at a bank counter that didn’t feel right for you? The RBI is cracking down on this practice, known as mis-selling. New rules would require banks to ensure that any third-party products they sell are actually suitable for your specific needs and your comfort with risk. The central bank is also drafting stricter guidelines for how these products are advertised and marketed.
Kinder Loan Recovery
Finally, the RBI is cleaning up how loans are collected. They are creating a single, clear set of rules for recovery agents to follow. This aims to end the aggressive or unfair practices that have led to many customer complaints, ensuring that everyone is treated with respect.
The draft revised instructions with these new proposed changes will be put in the public domain soon for public consultation.