India, Jan. 2 -- India's banking system may be expanding its digital reach, but a growing volume of customer complaints and online fraud cases is testing its ability to protect users. The Reserve Bank of India has said these issues pose a growing challenge for banks, even as services improve across the sector.

In its latest report, Trend and Progress of Banking in India 2025, the RBI said customer protection, transparency and trust will remain central to its policy approach. The regulator noted that a banking system can stay strong only when banks treat customers fairly and resolve complaints without delay, confusion or failure.

The RBI pointed out that the sharp rise in digital transactions has also led to an increase in cyber and onli...