RBI Warns Banks On Rising Fraud Cases, Delays In Customer Redressal

The Reserve Bank of India has pointed to a growing number of digital fraud cases and delays in customer complaint resolution, urging banks to do better as online transactions become more common. Also Read: SIM Swap Fraud Explained: How Scammers Hijack Your Mobile Number? Tips To Protect Yourself

In its latest review of the banking sector, the RBI said digital banking has expanded rapidly, but systems meant to protect customers are struggling to keep up. The central bank noted that unresolved complaints and slow responses weaken trust, especially at a time when more people rely on online banking for daily transactions. Also Read: Doctor Loses 36 Crores After Clicking A Facebook Ad Of Fake Investment Scam: How To Stay Safe

Digital Fraud Cases Continue To Rise

The RBI pointed out that the increase in digital payments has been accompanied by a rise in cyber fraud. These include unauthorised transactions, fake calls, phishing messages, and other online scams. The regulator said banks need to strengthen safeguards as fraud methods continue to evolve. Also Read: This RBI app will save you from scams and unfair fees

To deal with this, the RBI has introduced a principle-based authentication framework for digital payments. It has also rolled out a dedicated internet domain and a numbering series for regulated entities to help customers identify genuine communication from banks. The central bank has increased coordination with law enforcement agencies, including the Ministry of Home Affairs, to improve action against cybercrime.

Banks have been directed to tighten internal checks, ensure adequate grievance staff, and improve digital awareness among customers to help reduce fraud risks.

Complaint Redressal Delays Under Scrutiny

Along with fraud, the RBI has pointed out issues with how banks handle customer complaints. It said complaints should be addressed clearly and on time, and banks need to take responsibility for clearing pending cases.

To widen access to grievance redressal, the RBI has expanded its Integrated Ombudsman Scheme to include state cooperative banks and central cooperative banks. This allows customers of these banks to raise complaints under the same system used by larger commercial banks.

Steps Planned To Clear Pending Cases

The RBI has proposed changes to strengthen the role of Internal Ombudsmen within banks. Under draft rules, banks may move to a two-level complaint resolution system. This would allow Internal Ombudsmen to interact directly with customers and, in some cases, recommend compensation.

To deal with long-pending complaints, the central bank plans to run a two-month special drive starting January 1, 2026. The focus will be on cases that have remained unresolved with the Ombudsman for more than a month.

The RBI is also working on an upgraded complaint management system, which is expected to improve tracking and give customers clearer updates from the time a complaint is filed until it is closed. In parallel, it is reviewing rules related to advertising, mis-selling, recovery practices, and customer liability in unauthorised digital transactions.