Regulatory Alerts2026-06-24
Reserve Bank of India (Urban Co-operative Banks - Responsible Business Conduct) Third Amendment Directions, 2026
The Reserve Bank of India issued the Third Amendment Directions, 2026, to revise liability limits and protection mechanisms for Urban Co-operative Banks regarding unauthorized electronic banking transactions. The directions establish a zero-liability framework for customers in cases of bank negligence or third-party breaches, provided complaints are reported within five days, and introduce a compensation scheme covering up to 85% of net losses for small-value frauds up to ₹50,000. Additionally, the regulations mandate mandatory transaction alerts, 24x7 reporting channels, and specific timelines for grievance resolution and shadow reversals to enhance customer security and accountability.
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