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RBI Deputy Governor T Rabi Sankar has stressed the need for greater transparency in banking products and a strong focus on creating a zero fraud environment to sustain public trust. Speaking at the Indian Banking Technology Conference in Mumbai, he said clear and fair pricing is essential to retain customers, especially as technology rapidly reshapes banking and payments. Sankar noted improvements in payment system security, citing low fraud rates in UPI transactions, but said even small levels are unacceptable at scale. He called for collaboration among banks to improve pricing transparency, use technology more effectively, and strengthen customer protection. Reducing fraud and building trust, he said, are key to long-term growth and confidence in India's banking system.
Reserve Bank of India Deputy Governor T Rabi Sankar on Friday emphasised the need for greater transparency in banking products and services, calling on the industry to work towards a zero fraud environment to maintain public trust. Advertisement
Speaking at the concluding session of the 21st Indian Banking Technology Conference in Mumbai, Sankar said trust is central to retaining customers and ensuring long-term confidence in the banking system. He noted that transparent pricing of products and services is critical, warning that a lack of clarity could push customers to seek alternatives.
Sankar said the Indian banking system has made progress in effective pricing, but added that certain basic principles still need to be followed to assure customers that charges are fair and not exploitative. According to him, transparency in how prices are determined helps build confidence and strengthens customer relationships.
He also cautioned banks about the fast pace of technological change, particularly in areas such as payments. Sankar said there is no guarantee that existing banking functions will remain unchanged in the future, and institutions must be prepared to adapt. He encouraged banks to use technology to improve efficiency through aggregation, which can help achieve better pricing outcomes.
The deputy governor said that when pricing is worked out transparently, the scope for arbitrary or varying charges is reduced. He added that collaboration among banks will be essential in developing such systems and invited the industry to share suggestions on how transparency can be further improved.
Sankar highlighted that innovation works best when institutions collaborate rather than operate in isolation. He said shared efforts and collective thinking can help the banking sector address common challenges more effectively, especially in areas related to customer protection and system resilience.
On fraud, Sankar said there has been a decline in fraud incidents in payment systems, including card-based transactions. He noted that trends in this area have been improving over time. Referring to the Unified Payments Interface (UPI), he said the incidence of fraud stands at about 0.68 cases per lakh transactions.
In absolute terms, this translates to roughly 4,800 transactions affected by fraud each day, against a daily volume of around 70 crore transactions. While the proportion is low, Sankar said the absolute number remains significant due to the scale of digital payments in India.
He stressed that even low levels of fraud are not acceptable, given the large and diverse user base. According to him, maintaining trust in digital payment systems requires constant vigilance by banks, technology providers, and regulators.
Clarifying the concept of a zero fraud environment, Sankar said it does not imply that fraud can be completely eliminated. Instead, it represents an ongoing objective that keeps institutions alert and focused on building systems that minimise risks.
He concluded by saying that reducing fraud and improving transparency are essential to sustaining growth and inclusion in India's payment and banking systems.
Source: PTI
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