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India’s digital banking system has entered a new phase of protection after a major announcement from the Reserve Bank of India. The central bank signaled a stronger stand on customer safety amid rising online fraud. The message focused on trust, speed, and accountability.
RBI Governor Sanjay Malhotra outlined the measures after the Monetary Policy Committee meeting held on February 6, 2026. The announcement addressed customer losses from digital thefts. It also introduced broader reforms across banking, credit flow, and financial markets.
The new regulations promise compensation of up to Rs. 25,000 for small-value digital frauds. The framework covers unauthorised electronic banking transactions. These include UPI frauds, card misuse, and online transfer scams. The move aims to reduce stress for customers facing sudden losses.
The central bank plans to issue draft guidelines to strengthen customer protection. The first draft targets the mis-selling of financial products. Banks and lenders must match products with customer needs. The second draft focuses on loan recovery practices. Recovery agents must follow fair conduct rules. The third draft sets clearer limits on customer liability in unauthorised electronic transactions.
The RBI also plans a discussion paper on digital payment safety. The paper will explore safeguards for high-risk users. Senior citizens may receive added authentication layers. Certain transactions may see delayed credits to reduce fraud risks.
These steps reflect the RBI's focus on empowering customers. Digital payments continue to grow across India. Fraud risks have also evolved. The regulator aims to balance speed with safety.
The announcement even covered financial inclusion and credit expansion. The RBI completed reviews of the Lead Bank Scheme, Kisan Credit Card Scheme, and Business Correspondent Model. Revised draft guidelines will follow soon. A unified reporting portal will support better data management under the Lead Bank Scheme.
Credit access for small businesses received a push. The proposed limit for collateral-free loans to MSMEs will rise from Rs. 10 lakh to Rs. 20 lakh. The Reserve Bank of India also plans to allow banks to lend to REITs, subject to safeguards. The move supports real estate financing.
Urban cooperative banks received special attention. The RBI announced four measures to strengthen this segment. Loan limits for unsecured lending will rise. Housing loan rules for higher-tier banks will ease. The RBI will also launch Mission SAKSHAM. The initiative plans to train over 1.4 lakh participants from urban cooperative banks.
Non-banking financial companies will see simpler rules. NBFCs without public funds, with no customer interface, and with assets below Rs. 1,000 crore may not need registration. Some NBFCs will also get relief from branch expansion approvals.
The RBI also shared updates on financial markets. Revised rules for external commercial borrowings will come into force soon. The central bank plans to remove the Rs. 2.5 lakh crore cap under the voluntary retention route. New frameworks for corporate bond derivatives will also follow.
The combined measures signal a sharper focus on customer protection. They also support credit growth and financial stability. The Rs. 25,000 digital fraud compensation stands out as a trust-building step in India’s fast-growing digital economy.
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