The RBI (Payments Banks – Fraud Risk Management) Directions, 2026 establish a framework for Payments Banks (PBs) to prevent, detect, report, and manage fraud risks. The Directions require PBs to maintain a Board-approved Fraud Risk Management Policy covering fraud prevention, early detection, investigation, recovery, reporting, staff accountability, Early Warning Signals (EWS), and Red Flagged Accounts (RFA). The Board, Senior Management, and SCBMF are responsible for effective oversight and implementation. PBs must follow principles of natural justice before classifying accounts or persons as fraudulent and maintain proper procedures for investigation and reporting. Banks are required to strengthen transaction monitoring, data analytics, Central Fraud Registry (CFR) usage, and fraud prevention mechanisms. The Directions prescribe requirements for third-party accountability, staff responsibility whistle-blower mechanisms, fraud reporting to RBI and Law Enforcement Agencies (LEAs),
and timely submission of Fraud Monitoring Returns (FMRs). PBs must ensure proper audit, closure of fraud cases, reporting of theft and robbery incidents, and continuous improvement of fraud risk controls to enhance customer protection and regulatory compliance.
