RBI Announces Customer Protection, Digital Payment Safety and NBFC Reform Measures

The Reserve Bank of India (RBI) has unveiled a broad set of regulatory and consumer-focused measures covering customer protection, digital payment safety, MSME lending, NBFC compliance and financial markets, alongside its latest monetary policy decision. 

Customer Protection and Fraud Safeguards 

Following the Monetary Policy Committee meeting held between February 4 and 6, RBI Governor Sanjay Malhotra said the central bank will roll out new draft guidelines to strengthen customer safeguards across the financial system, while the repo rate was kept unchanged at 5.25%. 

The RBI will issue draft norms on mis-selling of financial products, recovery practices and the engagement of recovery agents, and rules on limiting customer liability in unauthorised electronic banking transactions. A framework has also been proposed to compensate customers up to ₹25,000 in small-value digital fraud cases. 

The Governor said the central bank will publish a discussion paper on improving digital payment security, including options such as delayed credit features and additional authentication layers for vulnerable user groups like senior citizens. 

Financial Inclusion and MSME Measures 

The RBI has completed a review of the Lead Bank Scheme, Kisan Credit Card framework and the Business Correspondent model, and will release revised draft guidelines. A unified reporting portal will also be introduced to streamline Lead Bank Scheme data management. 

Among additional steps, the collateral-free loan limit for MSMEs will be raised from ₹10 lakh to ₹20 lakh. Banks will also be permitted to lend to REITs, subject to prudential safeguards, to support funding flows into the real estate sector. 

Urban Cooperative Banks and NBFC Easing 

To strengthen Urban Cooperative Banks, the RBI announced higher limits for unsecured loans and loans to nominal members, along with removal of certain tenor and moratorium conditions on housing loans by Tier III and Tier IV UCBs.  

It will also launch Mission-SAKSHAM to train more than 140,000 UCB personnel to improve managerial and technical capabilities. 

For NBFCs, regulatory relaxations have been proposed to improve ease of doing business. NBFCs without public funds or customer interface and with assets up to ₹1,000 crore may be exempted from registration requirements. Certain NBFCs may also no longer need prior approval to open more than 1,000 branches. 

Read More: RBI Eases NBFC Norms for Smaller Shadow Banks! 

Conclusion 

Alongside holding policy rates steady, the RBI has outlined a wide regulatory package focused on consumer protection, safer digital finance, broader MSME access and compliance easing, signalling a parallel push on financial system quality and inclusion. 

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