RBI proposes transaction delays and security checks to curb digital fraud
The Reserve Bank of India has proposed new safeguards against digital payment fraud, including a potential one-hour delay for transactions over ₹10,000 and additional authentication for senior citizens. These measures aim to combat rising fraud incidents, particularly 'authorised push payment' scams, and will be open for public feedback until May 8, 2026.
Key Highlights
- RBI proposes one-hour delay for digital transactions above ₹10,000.
- Additional authentication for senior citizens and vulnerable groups.
- A 'kill switch' feature for instant disabling of digital payments.
- Measures aim to curb rising digital payment frauds in India.
- Feedback sought on proposals by May 8, 2026.
In a significant move to address the escalating problem of digital payment fraud in India, the Reserve Bank of India (RBI) has unveiled a discussion paper outlining a series of proposed safeguards. The central bank is considering introducing a mandatory time lag for certain digital transactions, enhancing security protocols for vulnerable user groups like senior citizens, and empowering customers with greater control over their payment activities. These proposals are a direct response to the alarming surge in fraudulent activities that have accompanied the rapid expansion of digital payments across the nation.
The RBI's discussion paper highlights a dramatic increase in digital payment fraud. According to data from the National Cyber Crime Reporting Portal (NCRP), fraud incidents related to digital payments have surged from 2.6 lakh cases in 2021 to 28 lakh cases in 2025. The financial impact of these frauds has also escalated significantly, with the value of reported fraud rising from ₹7,465 crore in 2023 to ₹22,931 crore in 2025. The paper specifically points to 'authorised push payment' (APP) frauds, where victims are tricked into initiating transactions themselves, as a major concern. Fraudsters employ various tactics, including bogus call centres, deepfake impersonation scams, and mule account networks, to exploit users.
One of the most prominent proposals is the introduction of a mandatory time lag, potentially up to one hour, for account-to-account digital transfers exceeding ₹10,000. The rationale behind this 'lagged credit' mechanism is to disrupt the psychological influence and urgency that fraudsters often impose on victims, thereby providing a critical window for reconsideration or cancellation of the transaction. During this proposed delay, the payer's bank would provisionally debit the customer's account, and the customer would retain the option to cancel the transaction. The RBI noted that transactions above ₹10,000 constitute a substantial portion of fraud cases by volume (around 45%) and an even larger share of the total fraud value (approximately 98.5%), justifying this threshold for enhanced scrutiny.
Recognizing that certain demographics are more susceptible to sophisticated fraud tactics, the RBI has also proposed additional authentication measures for vulnerable users. Specifically, for senior citizens (aged 70 and above) and persons with disabilities, high-value transactions (above ₹50,000) may require authentication by a pre-designated 'trusted person'. This measure aims to protect these groups from coercion and impersonation frauds, which disproportionately affect them. The proposal suggests that any change of a trusted person would be permitted only after a mandatory 24-hour cooling-off period, ensuring deliberate decisions. The threshold of ₹50,000 was chosen as it covers nearly 92% of fraud losses by value reported to the NCRP.
Furthermore, the discussion paper introduces the concept of a 'kill switch', a customer-controlled feature that would allow users to instantly disable all digital payment modes or freeze their accounts in case of suspected fraud. This initiative aims to strengthen the principle of customer-controlled security and enable faster response in critical situations. Similar features are already operational in some international markets.
To combat the use of mule accounts for laundering illicit funds, the RBI has also proposed capping annual aggregate credits into individual and small business accounts that have not undergone enhanced due diligence at approximately ₹25 lakh. Credits exceeding this limit would be held in a 'shadow credit' and released only after the bank verifies their legitimacy, failing which they would be reversed. This measure seeks to tighten monitoring of fund flows while minimizing disruption for genuine users.
The RBI has invited feedback and comments on these proposals from all stakeholders, including the public, financial institutions, and payment system operators. The comment period is open until May 8, 2026, after which the central bank will review the submissions and consider issuing draft guidelines for implementation. These proposed measures underscore the RBI's commitment to balancing the convenience and rapid growth of digital payments with the imperative of ensuring robust security and protecting consumers from financial fraud.
Frequently Asked Questions
What are the main proposals by the RBI to curb digital fraud?
The RBI has proposed several measures including a potential one-hour delay for digital transactions above ₹10,000, additional authentication for senior citizens and persons with disabilities for transactions above ₹50,000, a 'kill switch' feature for instant disabling of digital payments, and caps on credits to certain accounts to curb 'authorised push payment' frauds and other online financial crimes.
How will the proposed one-hour delay in transactions work?
For authorized push payment transactions exceeding ₹10,000, the RBI proposes a mandatory delay of up to one hour at the payer's end. During this period, the payer's bank would provisionally debit the account, allowing the customer to reconsider or cancel the transaction, thus acting as a preventive measure against fraudsters who rely on creating urgency.
What additional security measures are proposed for senior citizens?
For senior citizens and persons with disabilities, the RBI proposes an additional layer of authentication for high-value transactions (above ₹50,000). This may involve a 'trusted person' designated by the customer needing to authenticate such transactions before they are processed, to protect them from impersonation and coercion-based frauds.
What is the 'kill switch' feature?
The 'kill switch' is a proposed customer-controlled feature that would allow users to instantly disable all digital payment modes or freeze their accounts in case of suspected fraud. This aims to give customers immediate control over their digital transactions for enhanced security.
When will these proposed measures be implemented?
The RBI has released these proposals in a discussion paper and is seeking feedback from the public and stakeholders until May 8, 2026. After reviewing the comments, the central bank will decide on the final guidelines and potential implementation timeline.
