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RBI Customer Compensation: RBI Governor Shaktikanta Das announced in his monetary policy address that draft guidelines will soon be issued to protect customers. These will include provisions to limit customer liability in unauthorized banking transactions, clarify rules related to mis-selling of products, and address issues related to loan recovery.

RBI Customer Compensation: Amidst the increasing use of digital payments and online banking, the Reserve Bank of India (RBI) is taking a major step to protect customers. The central bank is working on a framework under which customers can receive compensation of up to ₹25,000 for losses incurred due to small digital frauds. The aim is to increase trust in the banking and digital payment system.

Plan to provide relief to customers from digital fraud

RBI Governor Shaktikanta Das announced in his monetary policy address that draft guidelines will soon be issued to protect customers. These will include provisions to limit customer liability in unauthorized banking transactions, clarify rules related to mis-selling of products, and address issues related to loan recovery.

Strict rules on recovery agents and loan procedures

The new guidelines will also bring the use of recovery agents and loan recovery methods under regulatory scrutiny to prevent any coercion or misconduct towards customers. In addition, a discussion paper will be released on measures to make digital payments more secure. With the increasing trend of online transactions and peer-to-peer lending, cases of fraud are also emerging. In this context, this RBI initiative is considered crucial in providing security to customers and bringing transparency to the system.

Experts say customer confidence will increase

According to Bhavin Patel, Co-founder and CEO of LenDenClub and Vartis Platforms, this step will prove to be a great support for customers who have been victims of fraud, and it will increase trust and accountability in the lending ecosystem. They say that the system of limited liability and compensation will encourage people to file complaints on time and reduce fear.

Benefits for both customers and institutions

Jyoti Prakash Gadia, MD of Resurgent India Limited, believes that this move by the RBI reflects a customer-centric approach. It includes aspects such as protecting senior citizens. At the same time, it also aims to boost the economy by providing sufficient liquidity to banks.

RBI has implemented several reforms before

Experts say that recent decisions, such as increasing the limit for unsecured loans for MSMEs and providing relief in regulations related to NBFCs, also demonstrate the RBI's proactive and balanced approach, where both customers and financial institutions are taken into consideration.