In a significant move to bolster customer protection, RBI Governor Sanjay Malhotra revealed plans for revised norms on Friday. Banks will soon be obligated to reimburse customers for low-value fraudulent transactions under forthcoming regulations.
The announcement comes after a meticulous review of the 2017 guidelines on unauthorized electronic transactions. Those rules outlined liability limits and reporting deadlines, but rapid tech adoption in banking necessitated an overhaul. The new draft, focusing on compensation structures for minor frauds, will be released for public comments imminently.
Malhotra highlighted how evolving payment ecosystems demand updated safeguards. This initiative ensures customers aren’t left bearing the brunt of cyber scams in everyday digital dealings.
Parallel efforts target mis-selling rampant in financial services. Banks and NBFCs face tougher scrutiny to prevent pushing unsuitable products. Every third-party offering at branches must match the buyer’s risk profile and requirements, averting potential pitfalls.
Comprehensive directives covering promotion and distribution of these products are in the works, with drafts headed for consultation. On the recovery front, the RBI is harmonizing conduct codes for agents across banks and NBFCs. Scattered existing instructions will merge into a cohesive framework, promoting ethical debt collection.
This multi-pronged strategy underscores the RBI’s resolve to foster transparency and equity. By addressing fraud, mis-selling, and recovery abuses head-on, the central bank is paving the way for resilient consumer confidence in India’s financial sector.