The RBI said in the case of a complaint arising out of fraudulent EBT in a credit card, a bank should provide shadow reversal equivalent to the amount involved in the EBT within five calendar days from the date of receipt of notification from the customer. (File photo)The Reserve Bank of India (RBI) on Wednesday unveiled a revised compensation mechanism for victims of digital payment frauds and widened its framework for limiting customer liability.According to the central bank, a bona fide victim who has lodged a complaint involving gross loss of up to Rs 50,000 on account of fraudulent electronic banking transaction (EBT) will be compensated 85% of the net loss amount or Rs 25,000, whichever is less, once during the lifetime.The victim should report the fraudulent EBT on the National Cyber Crime Reporting Portal or National Cyber Crime Helpline (1930) and to the bank within five calendar days from its occurrence, it said in the RBI (Commercial Banks – Responsible Business Conduct) Third Amendment Directions, 2026.The new directions will apply in cases of electronic banking transactions undertaken by customers of a bank on or after January 1, 2027.For a complaint related to fraudulent EBT involving a loss amount of less than Rs 29,412, where a compensation of 85% is paid, 65% will be borne by the RBI, 10% by the customer’s bank and the remaining 10% by the beneficiary bank, the RBI said.In the case of a complaint arising out of cross-border fraudulent EBT, 65% will be borne by the RBI and the remaining 20% by the customer’s bank.For a complaint related to fraudulent EBT involving a loss amount of Rs 29,412 or more but up to Rs 50,000, where a compensation of Rs 25,000 is paid, the RBI, the customer’s bank and the beneficiary bank should contribute Rs 19,118, Rs 2,941 and Rs 2,941, respectively, towards the compensation in case of a complaint arising out of domestic fraudulent EBT, it said.Story continues below this adIn the case of a complaint arising out of cross-border fraudulent EBT, the RBI and the customer’s bank will contribute Rs 19,118 and Rs 5,882, respectively, towards the compensation, it said.“Beneficiary bank refers to the bank holding the account where the fraudulently debited amount is first credited. In cases where there is more than one beneficiary bank, the applicable compensation to be borne by each bank shall be in the proportion of the amount credited to their respective account.In case any recovery is made in relation to a complaint involving fraudulent EBT after the compensation is paid, the customer’s bank should recalculate the compensation payable on the net loss amount and accordingly make additional payment from the recovered amount after factoring in the excess amount of compensation, if any, paid before the recovery, the RBI said.The RBI said in the case of a complaint arising out of fraudulent EBT in a credit card, a bank should provide shadow reversal equivalent to the amount involved in the EBT within five calendar days from the date of receipt of notification from the customerStory continues below this adUnauthorised electronic banking transaction means a transaction which is not authorised by a customer and includes an EBT occurring on account of negligence by a bank or a third-party breach, the RBI said.George Mathew is an Associate Editor with The Indian Express, based in Mumbai. A veteran of financial journalism with nearly three decades of experience, he is one of the country’s most authoritative voices on banking, regulation, and the corporate sector. Expertise & Focus Areas Mathew’s reporting covers the nerve center of India’s economy. His specialized beats include: The Reserve Bank of India (RBI): He has tracked the central bank's policy evolution through the tenures of multiple Governors, offering deep insights into monetary policy, repo rates, and banking regulation. Banking & Insurance: Extensive coverage of public and private sector banks, non-performing assets (NPAs), and key legislative reforms like the Insurance Amendment Bills. Corporate Affairs: Mathew frequently breaks major stories related to India's largest conglomerates, with a specific focus on the Tata Group, documenting boardroom shifts and strategic decisions. Financial Markets: Reporting on the complexities of Foreign Portfolio Investors (FPIs), IPOs, and currency fluctuations. Authoritativeness & Insight With a career dating back to the late 1990s, Mathew possesses a rare institutional memory of India’s financial liberalization and market crises. His work is not limited to daily news; he frequently contributes to the "Explained" section, where he decodes complex financial legislations and market trends for a broader audience. His rigorous reporting has also been featured in scholarly platforms like the Economic and Political Weekly (EPW). Find all stories by George Mathew here ... Read More