meta_id 2942971

On March 26, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Commercial Banks - Responsible Business Conduct) Third Amendment Directions, 2026, revising instructions on customer liability in unauthorised electronic banking transactions for commercial banks (excluding Small Finance Banks, Payments Banks, Regional Rural Banks, and Local Area Banks). The amended directions, effective July 1, 2026, introduce a comprehensive framework for customer protection in electronic banking transactions. Key changes include revised definitions of authorised and unauthorised electronic banking transactions, with specific provisions addressing fraudulent transactions occurring through customer negligence, bank negligence, or third-party breaches. The directions establish that banks bear the burden of proving customer liability in fraudulent transaction complaints. The framework introduces a zero-liability provision for customers when fraudulent transactions result from bank negligence or deficiency, regardless of reporting timeliness. For third-party breaches, customers receive zero liability if they report unauthorised transactions within five calendar days of occurrence. Customers reporting after five days may receive compensation under a new mechanism for small-value fraudulent transactions. The directions establish a compensation scheme for individual customers experiencing losses up to ₹50,000 from fraudulent electronic banking transactions. Eligible customers receive 85 percent of net loss or ₹25,000, whichever is less, once during their lifetime. Compensation costs are shared between the Reserve Bank (65 percent for losses under ₹29,412), the customer's bank, and the beneficiary bank. Banks must resolve complaints within 30 calendar days and provide mandatory SMS alerts for transactions exceeding ₹500. Banks must establish 24/7 reporting channels for fraudulent transactions and implement robust fraud detection systems. The directions require banks to formulate transparent customer protection policies and maintain Board-level monitoring of fraudulent transaction complaints.