The digital payment and banking landscape has evolved considerably since issuance of the existing instructions on limiting liability of customers in unauthorised electronic banking transactions in 2017. Upon a review, it has been decided to issue revised instructions on the subject to banks, which shall inter alia enhance the scope of existing instructions on limiting liability of customers in unauthorised electronic banking transactions to cover other categories of fraudulent electronic banking transactions, reduce the time taken by banks to process complaints related to fraudulent electronic banking transactions, and introduce a compensation mechanism for small value fraudulent electronic banking transactions.

2. Accordingly, in pursuance of the announcement made in the Statement on Developmental and Regulatory Policies dated February 6, 2026, the Reserve Bank of India (RBI) has today issued the following draft Amendment Directions for public comments, which propose to amend existing Directions on Responsible Business Conduct issued by the Department of Regulation, RBI.

1. Reserve Bank of India (Commercial Banks - Responsible Business Conduct) Third Amendment Directions, 2026

2. Reserve Bank of India (Small Finance Banks - Responsible Business Conduct) Third Amendment Directions, 2026

3. Reserve Bank of India (Payments Banks - Responsible Business Conduct) Second Amendment Directions, 2026

4. Reserve Bank of India (Local Area Banks - Responsible Business Conduct) Third Amendment Directions, 2026

5. Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Third Amendment Directions, 2026

6. Reserve Bank of India (Urban Co-operative Banks - Responsible Business Conduct) Third Amendment Directions, 2026

7. Reserve Bank of India (Rural Co-operative Banks - Responsible Business Conduct) Third Amendment Directions, 2026

3. The compensation mechanism proposed to be introduced under these Amendment Directions will be in force for one year from the effective date of these Directions. This will be reviewed on the basis of the experience gained with an objective of enhancing the share of the banks and reducing / eliminating the share of RBI in the compensation paid to the victims.

4. The comments / feedback on the draft Amendment Directions may be submitted by the regulated entities and members of public / other stakeholders on or before April 6, 2026 through the following channels:

i. the ‘Connect 2 Regulate’ section on the website by following the corresponding hyperlink provided against each document in the page where they are hosted; or

ii. by email with the subject line ‘Feedback on (full name of the draft Amendment Directions (including the type of Regulated Entity))’.

(Brij Raj)           
Chief General Manager

Limiting customer liability in digital transactions expanded to cover more fraud and introduce a temporary compensation mechanism. RBI has published draft Amendment Directions to broaden the scope of limits on customer liability in digital transactions to include additional fraudulent electronic banking transactions, mandate faster bank processing of fraud complaints, and establish a temporary compensation mechanism for small-value frauds subject to a one-year review aimed at shifting more compensation responsibility to banks.