UPSC Prelims Practice Questions — RBI Strengthens Framework on Unauthorised Electronic Banking Transactions

Question 1

Under RBI's 2017 framework on limiting customer liability in unauthorised electronic banking transactions, for which one of the following account categories is the maximum customer liability prescribed (in the four-to-seven working-day reporting window) the highest?

Accepted Answer

Other current accounts and credit cards with limit above Rs 5 lakh

Answer

Basic Savings Bank Deposit Accounts (BSBDA)

Answer

Savings accounts and Prepaid Payment Instruments (PPIs)

Answer

MSME accounts and credit cards with limit up to Rs 5 lakh

Question 2

In which year did the RBI first issue its comprehensive circular limiting the liability of customers of scheduled commercial banks in unauthorised electronic banking transactions?

Accepted Answer

2017

Answer

2008

Answer

2016

Answer

2019

Question 3

With reference to the RBI draft amendment (issued for public consultation in March 2026) to the framework on unauthorised electronic banking transactions, consider the following statements:
1. The draft introduces a compensation mechanism for small-value fraudulent electronic banking transactions, a feature not present in the 2017 framework.
2. The revised instructions build upon the extant instructions that the RBI had first issued in 2017.
3. The draft shifts the burden of proving customer liability from the bank onto the customer.
Which of the statements given above is/are correct?

Accepted Answer

1 and 2 only

Answer

2 and 3 only

Answer

1 and 3 only

Answer

1, 2 and 3

Question 4

Which one of the following is the principal new safeguard for customers introduced by the RBI's March 2026 draft amendment to the framework on unauthorised electronic banking transactions?

Accepted Answer

A compensation mechanism for small-value fraudulent electronic banking transactions

Answer

Extension of the zero-liability reporting window to thirty working days

Answer

Complete abolition of the limited-liability category

Answer

Transfer of grievance redressal from banks to the Banking Ombudsman alone

Question 5

The RBI's draft instructions on unauthorised electronic banking transactions fall within the administrative purview of which one of the following departments of the Government of India?

Accepted Answer

Department of Financial Services, Ministry of Finance

Answer

Department of Economic Affairs, Ministry of Finance

Answer

Department of Revenue, Ministry of Finance

Answer

Department of Expenditure, Ministry of Finance

Question 6

The early RBI deliberations on protecting bank customers, which preceded the framework on customer liability, are associated with the Committee on Customer Service in Banks set up by the RBI under the chairmanship of:

Accepted Answer

M. Damodaran

Answer

Nachiket Mor

Answer

Nandan Nilekani

Answer

Y. H. Malegam

Question 7

The 2017 master circular limiting customer liability for scheduled commercial banks was issued by which department of the Reserve Bank of India?

Accepted Answer

Department of Banking Regulation (DBR)

Answer

Department of Payment and Settlement Systems (DPSS)

Answer

Department of Supervision (DoS)

Answer

Consumer Education and Protection Department (CEPD)

Question 8

The AI/ML-based solution MuleHunter.AI, used to identify mule bank accounts, was developed in-house by which one of the following?

Accepted Answer

Reserve Bank Innovation Hub (RBIH)

Answer

National Payments Corporation of India (NPCI)

Answer

Indian Cyber Crime Coordination Centre (I4C)

Answer

Indian Computer Emergency Response Team (CERT-In)

Question 9

MuleHunter.AI was first piloted by the RBI with banks belonging primarily to which one of the following categories?

Accepted Answer

Public sector banks

Answer

Private sector banks

Answer

Payments banks

Answer

Urban co-operative banks

Question 10

In a case of unauthorised electronic banking transaction under the RBI framework, the burden of proving customer liability rests primarily on which one of the following?

Accepted Answer

The bank

Answer

The customer

Answer

The Banking Ombudsman

Answer

The law-enforcement cyber-crime cell

Question 11

MuleHunter.AI, the RBI's AI/ML-based fraud-detection initiative, is intended primarily to serve as a faster and more accurate alternative to which one of the following existing approaches used by banks?

Accepted Answer

Static rule-based detection systems

Answer

Two-factor authentication for transactions

Answer

Periodic manual KYC re-verification

Answer

The Banking Ombudsman grievance mechanism

UPSC Prelims Practice Questions — RBI Strengthens Framework on Unauthorised Electronic Banking Transactions

Q1. Under RBI's 2017 framework on limiting customer liability in unauthorised electronic banking transactions, for which one of the following account categories is the maximum customer liability prescribed (in the four-to-seven working-day reporting window) the highest?

Q2. In which year did the RBI first issue its comprehensive circular limiting the liability of customers of scheduled commercial banks in unauthorised electronic banking transactions?

Q4. Which one of the following is the principal new safeguard for customers introduced by the RBI's March 2026 draft amendment to the framework on unauthorised electronic banking transactions?

Q5. The RBI's draft instructions on unauthorised electronic banking transactions fall within the administrative purview of which one of the following departments of the Government of India?

Q6. The early RBI deliberations on protecting bank customers, which preceded the framework on customer liability, are associated with the Committee on Customer Service in Banks set up by the RBI under the chairmanship of:

Q7. The 2017 master circular limiting customer liability for scheduled commercial banks was issued by which department of the Reserve Bank of India?

Q8. The AI/ML-based solution MuleHunter.AI, used to identify mule bank accounts, was developed in-house by which one of the following?

Q9. MuleHunter.AI was first piloted by the RBI with banks belonging primarily to which one of the following categories?

Q10. In a case of unauthorised electronic banking transaction under the RBI framework, the burden of proving customer liability rests primarily on which one of the following?

Q11. MuleHunter.AI, the RBI's AI/ML-based fraud-detection initiative, is intended primarily to serve as a faster and more accurate alternative to which one of the following existing approaches used by banks?