New Delhi, Feb. 10 -- It is not often that the Reserve Bank of India (RBI) governor's statement on monetary policy includes an announcement that directly touches the lives of Indians at large. Repo rate changes and liquidity measures-the stuff that such statements are usually made of-are one stage removed, as their impact plays out through the banking system.

This time, however, citizens were direct beneficiaries of a proposal aimed at better customer protection.

On Friday, Governor Sanjay Malhotra said that RBI would introduce a framework to compensate bank customers up to Rs.25,000 each for losses incurred in fraudulent transactions of small value. These constitute roughly 65% of online frauds in India.

Notably, victims would not be ...