Banks want RBI to change ATM power-off fraud compensation rules
Banks are urging the RBI to update its rules on compensating customers hit by ATM power-off frauds—a scam where thieves switch off ATMs during withdrawals, tricking the machine into dispensing cash but logging a failed transaction.
Right now, banks have to pay customers back in accordance with the Harmonisation of Turn Around Time (TAT) for failed transactions for these cases, even if the problem wasn't their fault.
Banks say these quick payouts are being misused
Banks say these quick payout rules are being misused as ATM power-off scams rise—Pune alone lost ₹2 crore from 50 ATMs.
They want exceptions for suspected fraud so compensation isn't automatic.
Even though banking fraud cases have reportedly dropped, the total money stolen has shot up over 200%.
Plus, with fewer ATMs and security guards no longer required round-the-clock at all ATMs after a Supreme Court ruling in 2025, banks say this is making these machines easier targets for scammers.