Context: RBI scam compensation rules 2027
The Reserve Bank of India has revised its 2017 customer liability framework to extend protection to victims of certain online banking scams involving fraud or coercion.
The pilot framework will be effective from 1 January 2027.
Existing Rule, 2017
The 2017 framework covered only Unauthorised Electronic Banking Transactions.
Meaning
Unauthorised transactions are those where money is transferred without the customer’s authorisation.
Limitation
Authorised scams were not covered.
This means if a customer transferred money after being deceived, compensation was generally not available under the old framework.
Revised Rule, 2027 Pilot
The revised framework covers Fraudulent Electronic Banking Transactions.
Includes
- Digital arrest scams
- OTP theft
- Social engineering scams
- Fraud or coercion-based transfers
Effective Date
- 1 January 2027
Duration
- Pilot framework for one year
Compensation Rules
Eligible Loss
- Up to ₹50,000
Customer Compensation
- 85% of the loss
- Subject to a maximum of ₹25,000
Reporting Condition
Customer must report the incident to the Cybercrime Helpline 1930 within 5 days.
Not Covered
- Losses above ₹50,000
- Cases involving customer negligence
One-line Takeaway
2017: Protection only against unauthorised transactions.
2027: Protection extended to certain authorised-but-fraudulent scams, with limited compensation.
Significance
- Recognises changing nature of cyber fraud.
- Protects victims of social engineering and coercive scams.
- Encourages quick reporting through cybercrime helpline.
- Strengthens consumer protection in digital banking.
- Pushes banks to improve fraud monitoring and response systems.
Mains Usage
This can be used in answers on:
- Digital banking security
- Cyber fraud
- Consumer protection
- Financial inclusion
- RBI regulation
- Digital literacy
- Trust in digital payments
