RBI to pay cyber fraud victims INR 25k

Amid growing digital fraud, the Reserve Bank of India (RBI) on Thursday said that banking customers will receive compensation of up to INR 25,000 for a fraudulent transaction.A customer will be paid the compensation even in cases where the customer ends up sharing the one-time password (OTP) with the fraudsters, Reserve Bank Governor Sanjay Malhotra said.

The money will be paid to the bank customers from the INR 85,000 crore Depositor Education and Awareness (DEA) Fund, central bank officials said, making it clear that a customer can get compensation only once in a lifetime and provided that no malafide intent is found.Even though their overall value is low, two-thirds of the digital frauds are under INR 50,000 in amount, the RBI brass said, stressing that a bulk of the fraud-hit people stand to benefit from the facility.

“As long as they are defrauded, whether on their own accord or anyone’s accord, no questions asked, INR 25,000 will be paid. We will compensate them as long as it (the transaction) is unintended and they have lost the money,” Malhotra said.He added that it is important to have customers’ “skin in the game”, and 15 per cent of the fraud amount will have to be borne by the account holder even if the fraud is under the INR 25,000 limit.

In cases of high-value fraud, the compensation will be capped at INR 25,000.A draft of the compensation framework will be issued soon for public consultation, Malhotra said.Deputy Governor Swaminathan J said that the money will be paid out of the DEA Fund, which also includes bank deposits which are unclaimed for over 10 years.“It is that particular segment, which unwittingly becomes a victim of such frauds, is what we are trying to cover. So, the financial impact (of compensating) may not be very high,” he added.