Explained: RBI’s updated rules to protect you from banking fraud
According to data by the Ministry of Home Affairs, Indians lose almost ₹22,500 crore annually to online financial fraud. In 2025, almost 28.15 lakh cases were reported across the country, with the overall volume of such cyber attacks rising by 24%.
Though many of us are now well aware of common tricks used by cyber criminals, there are cases when the cause of the fraud is not due to your negligence, but on the bank’s part or through sophisticated phishing and other cyber attacks.
Increased awareness is working, but there can be times when the situation is not in your control, and you lose a significant sum of money. To address this, the RBI, under its new notified rules to be implemented from January 1, 2027, is introducing a new compensation framework that will make banks liable to pay up to 85% of the money defrauded, subject to certain conditions.
This comes after thousands of victims have had to run from pillar to post to claim compensation for their losses, with chances of recovering losses remaining slim. These rules allow victims to claim losses for the first such instance.
How the enhanced anti-cyber fraud rules work
If you are a victim to a digital scam (like a fake UPI request, an OTP scam or a trick phone call), you can get a partial refund, only if you report the fraud within 5 days. You have to report it to either the bank or the National Cyber Crime Helpline at 1930, or lodge your report online on its portal.
Following this, the bank will acknowledge, record and examine the complaint to determine who was at fault. The RBI has set a 60 day deadline for the banks to respond, with the bank paying you 85% of the money you’ve lost, up to a limit of ₹50,000.
Conditions that have to be met
However, these rules depend on whether the fraudulent transaction occurred due to the negligence or deficiency on the part of the bank itself or from a third-party transaction, or due to any action not in control of the bank or the customer.
The bank could still reject the compensation claim, but it has to provide a specific reason to do so, along with supporting evidence to justify it.
Closing thoughts
Though this remains a welcome move for customers, it does not remove the responsibility of being vigilant on the part of the customers. Customers have to keep their OTPs, PINs and passwords secret, and not trust anybody with them as these can be misused quite easily.
<p>The post Explained: RBI’s updated rules to protect you from banking fraud first appeared on Hello Entrepreneurs.</p>
