Liability Of Third Party Application Providers In E-Banking: A Legal Framework Under RBI Guidelines
- IJLLR Journal
- Mar 27
- 1 min read
Anaihya Jena, KIIT School of Law
ABSTRACT
India's digital payments have boomed, with UPI transactions increasing from 1.5 billion to over 14 billion a month since 2020, apps like PhonePe and Google Pay that make banking easy for millions. With this increasing UPI transaction, scams have also increased through third party apps, it's not clear who pays. RBI rules mainly hold banks responsible for unauthorized transactions, giving customers zero blame if they report quickly or if the bank stumbles, while app providers dodge direct fault despite handling logins and approvals. This paper looks at RBI and NPCI rules, plus the 2026 draft changes for better alerts, payouts and calls for fixes like required app checks and shared responsibility borrowing from Europe's PSD2 model to minimise fraud, speed up fixes and keep people trusting digital money without slowing down new tech.
