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RBI plans seamless rollout of 25k cyber fraud compensation
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Reserve Bank of India (RBI) is in the process of hammering out a hassle-free procedure to roll out the Rs 25,000 cyber fraud compensation scheme, which was announced in its monetary policy this month. The idea is to set up a seamless reimbursement mechanism for cyber fraud victims after an extensive study of public inputs, said top sources in the apex bank on Monday.
Draft guidelines for the compensation scheme will be issued soon to seek opinion from stakeholders, including citizens. The final blueprint will include the upper limit of monetary loss to trigger the compensation clause. An assessment by RBI shows as much as 65% of frauds involve small amounts, said a source. As per the initial announcement, cyber fraud victims would receive 85% or Rs 25,000, whichever is less. However, they would have to give up 15% of the loss as “skin in the game”, according to the RBI announcement.
RBI would plough in funds for the compensation scheme through interest earned from unclaimed deposits in banks. A big portion of unclaimed deposits are lying in branches across the country, which would be enough for paying off the compensation, said sources. Even as RBI is conducting a drive to pay back unclaimed deposits, there are enough funds left to compensate cyber fraud victims, the top source said. Depositor’ Education and Awareness Fund is created from unclaimed deposits in accounts that are inoperative for 10 years.
RBI is adopting a holistic approach towards cyber frauds and if compensation payment to a conned customer is one aspect, the bank is also focusing on prevention of fraud within the system. Regular training is being conducted with police, the source said.
It’s observed that credit card systems are much safer in the country, as there is a time lag in processing the transaction and the customer is generally not charged if the transaction was not done by the cardholder. However, the money is quickly lost from accounts through UPI or net banking frauds, a source said. RBI is also working to ensure financial inclusion, opening bank accounts in remotest corners of the country. It also launched the financial literacy week.
