RBI plans ₹25,000 compensation for cyberfraud victims, Pg10

Key Highlights:

• The RBI plans to compensate victims of online fraud up to ₹25,000 for small-value fraudulent transactions.
• Draft guidelines will be issued soon, requiring both the victim and the bank to bear 15% of the transaction value.
• The RBI will cover the remaining amount from its Depositor Education and Awareness Fund, which holds nearly ₹85,000 crore.
• This compensation framework will apply to small-value fraudulent transactions, constituting 65% of online frauds.

Detailed Insights:

• The proposed framework aims to provide relief to victims of online fraud, especially in cases where the amount lost is relatively small.
• The Depositor Education and Awareness Fund of the RBI will be utilized to provide compensation, ensuring that victims receive financial assistance.
• For fraudulent transactions below ₹50,000, victims will receive compensation without extensive questioning, even if they shared their OTP.
• The RBI will implement checks to prevent misuse of the compensation framework, ensuring that claims are legitimate and not made in bad faith.

Key Concepts Involved:

• Online Fraud: Deceptive activities conducted over the internet to obtain money or personal information.
• RBI's Depositor Education and Awareness Fund: Fund used to promote awareness and protect the interests of bank depositors.
• OTP (One-Time Password): A password that is valid for only one login session or transaction.