According to RBI Governor Sanjay Malhotra, the second set of guidelines will focus on loan recovery practices, including the conduct and engagement of recovery agents. (File photo) The Reserve Bank of India (RBI) has proposed to introduce a comprehensive framework to compensate bank customers for losses caused by small value fraudulent transactions, with the limit of compensation being Rs 25,000 per case. The move aims to strengthen consumer protection in the rapidly growing digital banking ecosystem.

As part of customer-centric measures, the RBI on Friday announced that it will issue three separate draft guidelines for public consultation. The first will address mis-selling of financial products, seeking to ensure greater transparency and accountability on the part of banks and financial institutions. According to RBI Governor Sanjay Malhotra, the second set of guidelines will focus on loan recovery practices, including the conduct and engagement of recovery agents to prevent harassment and unfair treatment of borrowers.

The third will deal with limiting customer liability in cases of unauthorized electronic banking transactions, providing greater clarity and protection for users affected by fraud, RBI said.