**Policy Summary: Measures to Promote Digital Transactions, Prevent Cyber Fraud, and Enhance Financial Inclusion**
This document summarizes the Indian government's initiatives to promote digital transactions, prevent cyber fraud, and increase regulation and transparency in cooperative societies and microfinance institutions (MFIs) for enhanced financial inclusion. The information is derived from Lok Sabha Unstarred Question No. 2352, answered on August 4, 2025, by the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary.
**Promotion of Digital Transactions and Prevention of Cyber Fraud:**
The Government of India, the Reserve Bank of India (RBI), and the National Payments Corporation of India (NPCI) have implemented various initiatives to encourage digital payment adoption. These include:
* Incentive schemes for RuPay Debit Cards and low-value BHIM-UPI person-to-merchant (P2M) transactions.
* The Payments Infrastructure Development Fund (PIDF) supports the deployment of digital payment infrastructure in underserved regions.
* Fraud prevention measures: Device binding (linking customer's mobile number to the device), two-factor authentication via PIN, daily transaction limits, and restrictions on use cases.
* NPCI provides banks with a fraud monitoring solution using AI/ML-based models to generate alerts and decline fraudulent transactions.
* RBI and banks conduct awareness campaigns through SMS, radio, and publicity to educate the public on cybercrime prevention.
**Regulation and Transparency of Cooperative Societies and MFIs:**
The government has undertaken measures to increase the regulation and transparency of cooperative societies and MFIs to improve financial inclusion, particularly for the poor and farmers in rural areas. Key initiatives include:
* RBI has mandated all regulated entities to adopt a board-approved policy for pricing microfinance loans, ensuring a transparent interest rate model that accounts for the cost of funds, risk premium, and margin.
* The definition of a microfinance loan has been simplified.
* Quantitative restrictions on loans given by NBFC-MFIs have been removed. This includes the removal of limits on loan amounts in a particular cycle and minimum tenure for loans above a certain threshold.
* The previous requirement of providing a minimum of 50 loans for income generation purposes has been removed to accommodate credit needs for medical, educational, and income-smoothing purposes.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for financial matters.
Lok Sabha: The lower house of the Parliament of India, where the unstarred question was addressed.
SHRI RAMASHANKAR VIDHARTHI RAJBHAR: Member of Parliament who posed the question regarding digital transactions and cyber fraud.
SHRI PANKAJ CHAUDHARY: Minister of State in the Ministry of Finance who provided the answer to the question.
Reserve Bank of India (RBI): The central bank of India, involved in promoting digital payments and regulating financial institutions.
National Payment Corporation of India (NPCI): An organization that operates retail payments and settlement systems in India, promoting digital transactions.
RuPay Debit Cards: An Indian domestic card payment network.
BHIMUPI: Bharat Interface for Money - Unified Payments Interface, a mobile payment system developed by NPCI.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 2352
ANSWERED ON MONDAY, AUGUST 04, 2025/SRAVANA 13, 1947 (SAKA)
DIGITAL TRANSACTIONS & CYBER FRAUD
†2352. SHRI RAMASHANKAR VIDHARTHI RAJBHAR:
Will the Minister of FINANCE be pleased to state:
(a) the special steps taken by the Government to promote digital transactions and prevent cyber fraud;
and
(b) the measures adopted by the Government to increase the regulation and transparency of cooperative
societies and microfinance institutions for financial inclusion, so that the poor and farmers in rural
areas may get easy loans and assistance?
Answer
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) The Government, Reserve Bank of India (RBI) and National Payment Corporation of India (NPCI) have
been taking up various initiatives to promote digital payment transactions. These inter alia, include
incentive scheme for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M),
Payments Infrastructure Development Fund (PIDF) to support deployment of digital payment infrastructure
in underserved regions.
Further, to prevent payment-related frauds, various initiatives have been taken up such as device binding
between the customer's mobile number and device, two-factor authentication through PIN, daily transaction
limits, and restrictions on use cases. NPCI also provides a fraud monitoring solution to all the banks to
generate alerts and decline transactions using AI/ML-based models. RBI and banks have been conducting
awareness campaigns through short SMS, radio campaigns, and publicity on the prevention of cyber-crime.
(b) Various initiatives have been taken from time to time to increase the regulation and transparency of
cooperative societies and microfinance institutions for financial inclusion.
These, inter alia include
• RBI has issued a regulatory framework to all regulated entities to adopt a board-approved policy for
pricing microfinance loans. This include a transparent interest rate model covering cost of funds, risk
premium, and margin.
• The definition of microfinance loan has been simplified and various quantitative restrictions on loans
given by NBFC-MFIs have been removed, including limits on loan amount in a particular cycle and
minimum tenure for loans over a particular threshold.
• Erstwhile requirement of providing minimum 50% loans for income generation purposes has been
dispensed with, considering the need of credit for medical, educational and income smoothening
purposes.
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