The Reserve Bank of India (RBI) has proposed a revised framework to address unauthorised electronic banking transactions, introducing a compensation mechanism for small-value fraud cases and strengthening safeguards against cyber threats.
The updated instructions, released for public and stakeholder consultation on March 6, 2026, come amid rapid growth in digital payments and increasing instances of cyber fraud. The proposed framework builds upon the existing 2017 guidelines on limiting customer liability in unauthorised transactions.
As part of efforts to enhance fraud detection and prevention, the Indian Digital Payment Intelligence Corporation (IDPIC) has been set up as a Section 8 company under the Companies Act, 2013. Incorporated in October 2025, the entity will focus on real-time monitoring and analysis of fraud in the digital payments ecosystem using Artificial Intelligence (AI), Machine Learning (ML), and Big Data Analytics.
The RBI has also deployed “MuleHunter.AI”, an AI-driven solution designed to identify mule accounts used for layering and diverting funds in cyber fraud cases. The system is currently operational in 26 banks and is being expanded further. In addition, banks have been directed to strengthen internal systems, deploy real-time transaction monitoring tools, and leverage advanced analytics to detect suspicious patterns and networks linked to fraudulent activities.
To curb the misuse of banking channels, the central bank has issued advisories outlining specific measures for prevention and early detection of cyber-enabled frauds, including stricter monitoring of accounts suspected to be used as money mules.
Alongside regulatory measures, efforts to improve financial awareness among citizens are also being scaled up. The RBI’s Centre for Financial Literacy (CFL) project, launched in 2017, has established 2,421 centres across the country as of March 2025 to promote community-based financial education. The annual Financial Literacy Week campaign continues to spread awareness on safe banking practices.
The RBI’s multimedia initiative “RBI Kehta Hai” and the Securities and Exchange Board of India’s (SEBI) “SEBI vs SCAM” campaign are also being used to educate the public about fraud risks. SEBI has additionally launched the Saa₹thi mobile app to provide investment-related information and protect users from scams.
The information was shared by Minister of State for Finance Pankaj Chaudhary in a written reply in the Rajya Sabha.
