RBI mandates banks freeze flagged account debits to curb fraud
The Reserve Bank of India (RBI) is rolling out fresh guidelines to help banks fight money mule scams and cyber fraud.
Starting on April 1, 2027, or such earlier date as a bank may decide to implement the SOP, banks will need to temporarily freeze debit transactions on accounts flagged as suspicious.
It is all about making it tougher for scammers to move stolen money.
Banks must notify and resolve holds
These rules cover all commercial and urban cooperative banks, but they skip special accounts such as escrow or dividend accounts.
If your account gets a debit hold, the bank must tell you why, how to fix it, and who you can talk to for help.
You will have 20 days to explain your side, and the bank must take a decision within 10 days of receipt of the explanation, or within 30 days from the date of the temporary debit hold if no explanation is received.
RBI also wants banks to step up their monitoring systems and customer support so fraud gets caught faster, and complaints do not get lost in the shuffle.