RBI moves to boost digital transactions, protect users

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For promoting trust and confidence in this powerful channel, a dedicated and powerful grievance redressal mechanism is a pre-requisite.
Atmadip Ray & Ashwin Manikandan

MUMBAI: With digital transactions gaining currency, the Reserve Bank of India (RBI) has announced customer-protection measures to promote and improve confidence in the channel that would help New Delhi achieve its objective of nudging the country to a ‘less-cash’ economy.
In two separate programmes, the RBI announced reduced consumer liability in case of reported fraudulent digital transactions, and a grievance redressal mechanism for such modes of payment. “The RBI’s endeavour to facilitate a less-cash society has facilitated a significant rise in the volumes, value and channel for conducting digital transactions,” central bank deputy governor M K Jain said Wednesday.

“For promoting trust and confidence in this powerful channel, a dedicated and powerful grievance redressal mechanism is a pre-requisite.” The central bank said customers reporting unauthorised electronic transactions early can’t be made liable, irrespective of the instrument used. This is an extension of its previous direction where the RBI sought to protect customers for frauds in online and credit-card transactions.

The ambit of customer protection against frauds has now been extended, with the benefit of limiting customer liability now applying to unauthorised electronic transactions involving prepaid payment instruments. The central bank will issue the relevant guidelines by the end of December.

Earlier, RBI said customers can’t be made liable at all if they notify the bank within three working days of the fraud. RBI had capped the customer liability at Rs 25,000 if they reported unauthorised transactions within seven working days. The central bank has also unveiled an ombudsman scheme for digital transactions as a customer-protection initiative.

“An ombudsman scheme… is being formulated by RBI to provide a cost-free and expeditious avenue to tackle the rising number and complexity of complaints from this channel,” Jain said.
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This September, 181 million NEFT transactions worth about Rs 18 lakh crore and 486.5 million mobile banking transactions worth about Rs 21.3 lakh crore took place in the banking system, according to the latest RBI data.
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