India to compensate customers for small digital frauds, central bank says
India will compensate customers up to 25,000 rupees ($276) for losses incurred in small-value digital frauds, Reserve Bank of India Governor Sanjay Malhotra said on Friday.
The plan comes against the backdrop of a surge in frauds amid growing penetration of digital payments in the world's most populous country.
The proposed compensation will be a one-time relief and will cover up to 85% of the amount lost or 25,000 rupees, the governor said.
"As long as (the customers) are defrauded whether on their own accord or anyone else's accord, no questions asked... we will compensate them as long as it is unintended," Malhotra said in the post-policy press conference.
Nearly 65% of the frauds reported by banks involve losses of less than 50,000 rupees, Malhotra said. "The amount is very small (for us), but for small customers... this is a way of providing some immediate relief and solace," Malhotra said.
A depositor education and awareness fund may be used to pay the compensation, RBI Deputy Governor Swaminathan J. told reporters.
Detailed rules have not been issued.
FOCUS ON CURBING MISS-SELLING
The central bank said it will issue fresh guidelines on mis-selling of products by lenders, recovery of loans and the use of agents to recover debts.
Third-party products and services being sold at bank counters should be suitable to customer needs and commensurate with their risk appetite, the RBI said.
The regulator said it will also publish a discussion paper on measures to enhance the safety of digital payments, with the introduction of "lagged credits" and additional authentication for senior citizens.
($1 = 90.2850 Indian rupees)
