These Directions are applicable to Commercial Banks, Small Finance Banks, Payments Banks, Local Area Banks, Local Area Banks, Regional Rural Banks, Urban Coop Banks and Rural Coop Banks. The revised framework introduce definitions for fraudulent electronic banking transactions, unauthorised transactions, customer negligence, bank negligence, third-party breaches, and shadow reversals. The banks are required to establish transparent customer protection policies, strengthen fraud detection systems, provide mandatory SMS and email transaction alerts, maintain 24×7 fraud reporting channels, and ensure prompt acknowledgement and resolution of complaints. It prescribe zero customer liability where fraud results from bank negligence or timely reported third-party breaches, while defining customer liability in cases involving customer negligence. It also introduce a compensation mechanism for eligible small value fraudulent transactions, prescribe timelines for complaint disposal and transaction reversals, require shadow reversals for credit card fraud complaints, prohibit charges for mandatory regulatory SMS alerts.
(Link: RBI Circular 167/2026 (CB), 168/2026 (SFB), 169/2026 (PB), 170/2026 (LAB), 171/2026 (RRB), 172/2026 (UCB), 173/2026 (RCB) Dated 24/06/2026)