New Delhi, Feb 6 (UNI) The Reserve Bank of India (RBI) on Friday announced a series of measures aimed at strengthening customer protection, enhancing digital payment safety and curbing mis-selling of financial products, alongside its latest monetary policy decision.
Mis-selling financial products and services by any Regulated Entity (RE) has significant consequences for both customers and the RE. There is a felt need to ensure that third-party products and services that are being sold at the bank counters are suitable for customer needs and are commensurate with the risk appetite of individual clients, RBI Governor Sanjay Malhotra said.
“It has, therefore, been decided to issue comprehensive instructions to REs on advertising, marketing and sales of financial products and services. The draft instructions in this regard shall be issued shortly for public consultation,” he said. Further, the Governor also talked about the review of the framework of Limiting Customer Liability in digital transactions. The extant instructions on limiting the liability of customers in unauthorised electronic banking transactions were issued in 2017, which deal with scenarios and timelines for zero / limited liability of a customer, he said.
“In view of the rapid adoption of technology in the banking sector and payments systems, since the issuance of these instructions, the existing instructions have been reviewed. Accordingly, the draft revised instructions, including a framework for compensation in case of small value fraudulent transactions, shall be issued shortly for public consultation,” the Governor added.
He also highlighted that over the past decade, digital payments in India have expanded at an unprecedented pace, reflecting a structural shift in the way individuals and businesses conduct financial transactions. However, it has been accompanied by the growing sophistication of fraudulent activities targeting innocent customers.
In alignment to promote digital payments safely and securely, it is proposed to issue a Discussion Paper exploring the introduction of calibrated safeguards in digital payments, such as the introduction of lagged credits, additional authentication for a specific class of users like senior citizens, etc., the governor said. The proposed measures are intended to mitigate fraud and strengthen customer protection.
