Module: General Practice
Q21: Consider the following statements regarding the new digital fraud compensation framework:
Statement 1: Customer liability in unauthorized electronic banking transactions is governed by RBI guidelines, which historically limited a victim's financial loss if the fraud was reported promptly.
Statement 2: The RBI has rolled out a new compensation framework designed to instantly reimburse victims of small-value digital payment frauds, shifting the immediate financial burden to the payment ecosystem.
Statement 3: Under this framework, victims of unauthorized digital transactions are eligible for a maximum direct zero-liability compensation of up to ₹25,000.
Statement 4: To claim this specific compensation, the customer must formally report the fraudulent transaction to the bank within a strict window of 3 working days.
Which of the above statements is/are correct?
Statement 2: The RBI has rolled out a new compensation framework designed to instantly reimburse victims of small-value digital payment frauds, shifting the immediate financial burden to the payment ecosystem.
Statement 3: Under this framework, victims of unauthorized digital transactions are eligible for a maximum direct zero-liability compensation of up to ₹25,000.
Statement 4: To claim this specific compensation, the customer must formally report the fraudulent transaction to the bank within a strict window of 3 working days.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
All statements are correct. (Option D)This new framework addresses a critical gap: previously, investigating small frauds cost banks more than the fraud amount, leaving victims frustrated by long wait times for small refunds.
Structural Breakdown: By creating an automated, no-questions-asked refund mechanism for small amounts, the RBI enhances trust in digital payments while freeing up bank resources to investigate large, organized cybercrimes.
Historical / Static Context: Under the 2017 RBI circular on Customer Protection, if a customer reported a fraud within 3 working days, they had zero liability.
However, the reversal of funds took weeks.
The Dynamic Update (NEW) & Data: The February 2026 framework qualitatively changes the speed of redressal, introducing instant reimbursements for small-value frauds (Statement 2). The hard data metrics cap this immediate, automated compensation at ₹25,000 (Statement 3), provided the strict regulatory reporting window of 3 working days is honored by the victim (Statement 4).