Central bank plans compensation for small digital transaction losses

In a significant move to safeguard bank customers and boost small businesses, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced a slew of customer-centric measures on Friday. The central bank has proposed a new safety net that could see customers compensated up to Rs 25,000 for losses suffered during small-value fraudulent transactions.

This announcement comes as part of the RBI new guidelines aimed at tightening digital security and enhancing financial inclusion. Governor Malhotra highlighted that the central bank is working on a framework to protect users from unauthorized electronic banking transactions. To further secure digital payments, the RBI plans to issue a discussion paper proposing additional authentication steps, specifically designed to protect vulnerable groups like senior citizens.

For the business community, particularly in states like Odisha where small enterprises drive the local economy, there is welcome news regarding credit. The RBI has proposed doubling the limit for collateral-free loans to Micro, Small and Medium Enterprises (MSMEs). The existing limit of Rs 10 lakh is set to be increased to Rs 20 lakh, making it easier for entrepreneurs to secure capital without pledging assets.

Financial inclusion remains a top priority. The Governor stated that the Lead Bank Scheme and the Kisan Credit Card Scheme have undergone a comprehensive review. Revised guidelines are expected soon, alongside a new unified reporting portal to better manage banking data.

Urban Cooperative Banks (UCBs) also received attention in the policy statement. The RBI introduced 'Mission-SAKSHAM', a training initiative aiming to upskill over 1.4 lakh participants from UCBs to strengthen their technical and managerial capabilities. Additionally, limits on unsecured loans by UCBs are being raised to facilitate better credit flow.

Further easing regulations, the RBI proposed that Non-Banking Financial Companies (NBFCs) with an asset size under Rs 1,000 crore, which do not hold public funds or interface directly with customers, will be exempt from registration requirements.