Why in News?
The Reserve Bank of India has announced a first-of-its-kind compensation framework to provide relief to bank customers who suffer small-value digital frauds, alongside wider reforms on mis-selling and customer protection.
Description:
Key Terms:
- Digital / Cyber Fraud: Unauthorized electronic transactions involving cards, internet banking, UPI, etc.
- DEA Fund (Depositor Education and Awareness Fund): RBI-managed fund created from unclaimed deposits and penalties, used for depositor protection and awareness.
Compensation Framework for Digital Fraud Victims:
| Aspect | Details |
| Coverage | Applicable to small-value digital frauds |
| Relief Type | One-time compensation for the first such incident |
| Eligibility | Fraud must be unintended; applies whether caused by customer action or third-party action (“no questions asked”) |
| Maximum Compensation | ₹25,000 |
| Compensation Formula | 85% of amount defrauded OR ₹25,000, whichever is lower |
| Cost-sharing | RBI – Major share via Depositor Education and Awareness (DEA) FundBank – 15% contributionCustomer – Bears 15% of the loss |
| Funding Source | DEA Fund (surplus accumulated over time) |
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