Mumbai, February 6: The Governor of the Reserve Bank of India, Sanjay Malhotra, announced on Friday that the RBI will introduce new regulations to compensate customers for fraud in small-value transactions.
The RBI Governor stated that the existing guidelines, which limit customer liability for unauthorized electronic banking transactions, were issued in 2017. These guidelines outline scenarios for zero or limited liability for customers and specify timeframes. Given the rapid adoption of technology in the banking sector and payment systems, a review of these guidelines has been initiated.
Malhotra further mentioned that a draft of the revised guidelines, which will include a compensation framework for small-value fraudulent transactions, will soon be released for public consultation.
He also indicated that the RBI is tightening regulations to curb the mis-selling of financial products and services by banks and non-banking financial companies (NBFCs). The consequences of mis-selling financial products can be severe, affecting both customers and the financial institutions themselves.
The Governor emphasized the need to ensure that third-party products sold at bank counters align with customer needs and individual risk tolerance. Consequently, the RBI has decided to issue comprehensive guidelines for regional investors regarding the advertising, marketing, and sale of financial products and services. A draft of these guidelines will also be released for public consultation shortly.
Additionally, Malhotra noted that the RBI has decided to review and harmonize all existing conduct-related guidelines concerning the appointment of recovery agents and other aspects of loan recovery. A draft of these guidelines will be made available for public consultation soon.
Currently, different directives apply to the appointment of recovery agents and conduct-related aspects of loan recovery for various categories of regulated entities (RE), including banks and NBFCs.