Athira Sethu
Kochi, 7 March 2026
The Reserve Bank of India (RBI) has proposed new draft rules to safeguard customers in electronic banking transactions, which include online banking and card payments. The RBI (Commercial Banks – Responsible Business Conduct) Third Amendment Directions, 2026, have proposed the new rules, which will be applicable from July 1, 2026.
Here are the key points of the new rules:
Compensation for Small Fraud Losses
- If a customer suffers a loss of up to ₹50,000 due to a fraud, he or she will be compensated 85% of the net loss amount or ₹25,000, whichever is lower.
- For the compensation to be applicable, the fraud should be reported to the bank and the National Cyber Crime Reporting Portal within five days.
- In the case of smaller frauds, i.e., up to ₹29,412, the RBI will bear 65%, the customer’s bank will bear 10%, and the beneficiary bank will bear 10%.
Zero Liability for the Customer
In the case of a third-party breach or negligence on the part of the bank, the customer will not be liable for the fraud. The fraud should be reported to the bank within five days of the occurrence.
Mandatory Alerts and Better Security Features:
- Banks shall insist that their customers provide their mobile number and email ID for electronic transactions.
- Banks shall send alerts to their customers via email for all transactions, provided that the customers provide their email IDs.
- Banks shall send SMS alerts for transactions that are over ₹500. They may also send alerts for transactions that are less than ₹500, depending on their policies.
Customer Negligence:
Customers shall be considered negligent in case they:
- Share their transaction details like PIN, passwords, or OTPs with others.
- Fail to notify their bank immediately after noticing any suspicious transactions or losing their payment instruments.
- Fail to heed any warnings from their bank about any possible scams.
- Fail to take proper care of their credentials, like writing down their PINs with their cards.
- Download harmful applications.
All these are being done to improve security and make customers feel more protected in case of fraud, as well as to make banks more responsible in their transactions.
