RBI proposes framework to freeze only disputed amounts instead of entire accounts in cyber fraud cases

The Reserve Bank of India is introducing a new framework for handling cyber fraud cases, proposing that banks freeze only the specific disputed transaction amounts rather than entire bank accounts. This initiative aims to reduce inconvenience for customers while ensuring security. The proposal includes provisions for AI systems to monitor unusual transfers exceeding ₹1,000, a 20-day window for customers to provide proof of transaction legitimacy, and fixed timelines for banks and law enforcement to assess and act on these cases, with police having 30 days to issue formal restraint orders.