Digital frauds have become quite common in India, with scammers using tactics such as fake customer care numbers, phishing links, fraudulent investment schemes and impersonation calls to trick people, mostly senior citizens, into transferring money or sharing sensitive banking details.
In many cases, victims realise they have been scammed only after money has been debited from their bank accounts, leaving them to navigate the process of reporting the fraud and seeking a refund.
However, under new rules mandated by the Reserve Bank of India (RBI) you may no longer have to bear the entire loss from digital fraud. Victims can receive compensation of up to 85% of their net loss or ₹25,000, whichever is lower.
When will the rules come into effect?
The new rules will come into effect on January 1, 2027, and remain in force for one year. The RBI has also shifted the burden of proving customer liability in complaints involving fraudulent electronic banking transfers (EBTs) to banks.
In this case, EBTs would include transactions like point of sale (POS) transfers, automated teller machine transactions, direct deposits or withdrawal of funds, transfers initiated by telephone, internet and card payment.
Indians have lost around ₹52,976 crore to cyber-enabled frauds over the past six years, with nearly 8% of the losses linked to “digital arrest” scams, the National Human Rights Commission (NHRC) said on June 10, 2026.
Maximum compensation you can claim
As per RBI’s directions, digital fraud victims will be eligible for a compensation of up to ₹25,000, provided the value of the fraudulent transaction does not exceed ₹50,000. The benefit is available only once during a customer’s lifetime.
However, citizens must note that the compensation is not a flat ₹25,000. Eligible customers can receive 85% of the net loss, after deducting any amount already recovered, or ₹25,000, whichever is lower.
For instance, if a person loses ₹20,000 in a digital scam and the bank later recovers ₹10,000, the net loss comes down to ₹10,000. Since, the compensation is calculated at 85% of the net loss, the customer would be entitled to ₹8,500.
Similarly, if the net loss is ₹40,000, 85% of the loss comes out to ₹34,000. However, as the RBI has capped the compensation at ₹25,000 for eligible cases, the customer would receive the maximum amount of ₹25,000.
Meanwhile, cases involving losses exceeding ₹50,000 are outside the scope of these compensation directions.
Who will be liable to pay compensation?
In the case of a digital scam that emptied your balance, the bank where hold the account will be responsible for providing compensation. It will investigate the complaint, calculate the net loss after adjusting any recoveries made and credit the eligible compensation to your bank account.
While customers receive compensation from their banks, the financial burden is ultimately shared between the RBI and participating banks. The contribution of each entity depends on the value of the scam and whether the fraudulent transaction was domestic or cross-border.
How to report digital scams to banks and by when?
To be eligible for the maximum compensation, victims must report the fraudulent transaction to their bank within five calendar days.
The RBI has directed banks to advise its customers to report any fraud EBTs to their banks at the earlier. They must also lodge a complaint through National Cyber Crime Reporting Portal or National Cyber Crime Helpline (1930).