Overview The RBI has updated its 2017 instructions on liability for unauthorised electronic banking transactions. The revision, released for public consultation on 6 March 2026, adds a compensation scheme for small‑value fraud, expands AI‑driven analytics, and tightens controls against mule accounts and cyber‑fraud. The move aligns with the rapid digitisation of payments and the government’s broader push for financial security. Key Developments Introduction of a compensation mechanism for victims of low‑value fraudulent e‑transactions. Deployment of MuleHunter.AI across 26 banks, with plans for wider rollout. Mandate for banks to adopt real‑time transaction monitoring software, AI/ML tools, and network analytics for detecting suspicious patterns. Establishment of the Indian Digital Payment Intelligence Corporation (IDPIC) on 16 Oct 2025 to provide real‑time fraud analytics. Enhanced public‑awareness programmes: expansion of the CFL network (2,421 centres as of 31 Mar 2025), annual Financial Literacy Week , and the multimedia "RBI Kehta Hai" campaign. Collaboration with SEBI on the "SEBI vs SCAM" campaign and the Saa₹thi mobile app for fraud education. Important Facts • The revised instructions were issued on 06 March 2026 and are open for stakeholder consultation. • IDPIC operates as a Section‑8 company under the Companies Act, 2013, focusing on AI‑enabled fraud detection. • MuleHunter.AI is currently live in 26 banks, targeting accounts used for layering and diversion of illicit funds. • The CFL network covers three blocks per centre, ensuring grassroots outreach. UPSC Relevance Understanding the RBI’s regulatory updates is crucial for GS III (Economy & Governance) as they reflect the state’s response to digital financial risks, a key component of financial sector reforms. The creation of IDPIC illustrates public‑private collaboration in fintech security, a topic often examined in questions on technology governance. The emphasis on financial literacy ties into the government’s inclusive growth agenda and the role of institutions like the RBI and SEBI in consumer protection. Way Forward To maximise impact, the RBI should: Scale MuleHunter.AI to all scheduled banks and integrate it with the IDPIC analytics platform. Standardise the compensation framework across banks to ensure swift redressal for victims. Strengthen coordination with state governments and NGOs to broaden the reach of CFL centres, especially in remote and senior‑citizen demographics. Continuously update AI models to counter evolving fraud tactics, while maintaining data‑privacy safeguards. These steps will reinforce consumer confidence, curb cyber‑fraud, and support the sustainable growth of India’s digital payments ecosystem.