The customers using prepaid instruments will not take a hit out of liabilities arising out of a fraud if the incident is reported within three days, said Reserve Bank of India(RBI).. .


The RBI  has extended its customer protection framework in cases of payment frauds or unauthorised transactions to the users of authorised prepaid payment instruments (PPIs).


The users of PPIs now will not be liable for losses incurred due to fraud or discrepancy on part of the issuers. This is same as the rules for bank frauds.


Prepaid payment instruments (PPI) comprise mobile wallets, prepaid payments cards, and paper vouchers such as Sodexo.


In cases of third-party interference, there will be no customer liability if the matter is brought to notice within three working days, and up to Rs 10,000 if reported between four to seven days.


If the fraud is reported within four to seven days, the liability will be the “transaction value or Rs 10,000 per transaction, whichever is lower”. Considering PPIs are loaded typically with less than Rs 10,000, this means a delay of three days will mean that the user will have to incur the full loss.


If it is a third-party breach, where the transgression is neither on the part of the PPI issuer nor the customer but elsewhere in the system, the customer will have no liability if they report it within three days. For banks, the rules are already in place, but the latest notification expands the ambit of customer protection.