RBI MPC Highlights: From Rs 25,000 fraud cover to easier loans—What has Sanjay Malhotra announced for customers?

The Reserve Bank of India on Friday announced a series of measures aimed at strengthening customer protection, expanding financial inclusion and improving the flow of credit, as it concluded the Monetary Policy Committee meeting.

From proposing compensation of up to Rs 25,000 for victims of small-value digital frauds to raising the limit for collateral-free loans to MSMEs, the policy decisions are set to directly impact bank customers, borrowers and businesses.

RBI Governor Sanjay Malhotra outlined five key changes that are expected to shape how consumers and enterprises engage with the financial system going forward.

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Rs 25,000 Fraud Compensation

Speaking after the Monetary Policy Committee meeting, RBI Governor Sanjay Malhotra said the central bank will introduce a framework to compensate customers up to Rs 25,000 for losses arising from small-value fraudulent digital transactions. He said the move comes amid a rise in cases of unauthorised electronic banking transactions.

‘You are all aware that there have been several fraudulent transactions, for which the Reserve Bank has taken several measures. In this regard, we also propose to publish a discussion paper on possible measures to enhance the safety of digital payments,’ Malhotra said.

He said the proposed measures may include layered credit limits and additional authentication for specific categories of users, such as senior citizens, to reduce the risk of fraud and misuse.

Draft Guidelines on Mis-selling, Recovery Agents and Customer Liability

For customers, this means stronger protection against digital payment fraud and a clearer framework to limit their liability in case of unauthorised transactions. The RBI said it will issue three draft guidelines focused on customer protection. These will cover mis-selling of financial products, recovery of loans and the engagement of recovery agents, and limiting customer liability in unauthorised electronic banking transactions.

‘For customer protection, we will issue three draft guidelines. One is related to mis-selling. Two, regarding the recovery of loans and engagement of recovery agents. Three, on limiting liability of customers in unauthorised electronic banking transactions,’ the governor said.

Push for Financial Inclusion Through Revised Schemes

The RBI also announced steps to advance financial inclusion. Malhotra said the central bank has comprehensively reviewed the lead bank scheme, the Kisan Credit Card scheme and the business correspondent model.

Draft revised guidelines for all three will be issued, along with plans to launch a unified portal for better management of lead bank scheme data.

Collateral-Free MSME Loan Limit Raised to Rs 20 Lakh

For small businesses and MSMEs, the RBI proposed a major relief by increasing the limit for collateral-free loans. The current limit of Rs 10 lakh will be raised to Rs 20 lakh, a move expected to improve credit access for micro and small enterprises.

‘The limit of Rs 10 lakh for collateral-free loans to MSMEs is proposed to be increased to Rs 20 lakh,’ Malhotra said, adding that the limit had remained unchanged for a long time.

Liquidity Management, Credit Growth and Financial Stability

On liquidity and financial stability, the RBI said it will remain proactive to ensure adequate liquidity in the banking system. The governor noted that money market rates tightened in January after softening until December, due to a moderation in surplus liquidity and excess supply from redemptions in commercial papers and certificates of deposit.

‘Going ahead, the Reserve Bank will remain proactive in liquidity management and ensure sufficient liquidity in the banking system to meet the productive requirements of the economy and to facilitate monetary policy transmission,’ he said.

Malhotra said system-level financial stability indicators for scheduled commercial banks remain robust, with strong capital adequacy, liquidity and profitability. He added that NBFCs are also in a sound position, with adequate capital and improved asset quality.

He said credit growth has picked up in recent months, with overall credit from all sources rising 13.8 per cent compared with 11.6 per cent a year ago. Bank credit growth has been supported by sustained lending to retail, services, MSMEs and large industries.

For borrowers and investors, the RBI also announced measures to promote smoother operations for urban cooperative banks and NBFCs, improve the ease of doing business and deepen financial markets. The central bank said it will allow banks to lend to real estate investment trusts to support financing for the real estate sector.