RBI Governor Sanjay Malhotra revealed plans for fresh regulations concerning compensation for bank customers facing small-value fraudulent transactions. The existing guidelines, issued in 2017, are being revised to address the evolving technology landscape in banking and payments. The updated instructions, which will include a framework for compensating small-value fraud cases, will soon be open for public feedback.
Malhotra also highlighted the RBI’s efforts to enhance regulations preventing banks and NBFCs from mis-selling financial products. Mis-selling of financial products can have significant repercussions for both customers and financial institutions. To address this issue, the RBI will introduce comprehensive guidelines for the advertising, marketing, and sale of financial products and services, ensuring they align with customer needs and risk profiles.
Furthermore, the RBI aims to streamline and standardize conduct-related instructions related to the engagement of recovery agents and loan recovery processes. Currently, different instructions apply to various types of Regulated Entities (REs) like banks and NBFCs regarding the use of recovery agents and loan recovery practices. The RBI plans to release updated guidelines in this regard for public consultation soon.
