Reserve Bank of India (RBI) has proposed a set of new safeguards to tackle the sharp rise in digital payment fraud. These include ideas such as introducing a short delay in certain transactions, requiring additional checks for vulnerable users and giving customers more control over their accounts.
While these measures aim to improve safety, they also raise important questions about convenience, autonomy and how digital payments will function in practice. Here is a simple explainer addressing the key proposals, concerns and trade-offs.
1. What Exactly Is RBI proposing?
The key proposals include:
• A time delay (lag): Transfers above ₹10,000 to a new beneficiary may be delayed by up to one hour, during which the sender can cancel the transaction.
• Additional authentication for vulnerable users: Individuals aged 70+ (and persons with disabilities) may require approval from a nominated 'trusted person' for high-value transactions (above ₹50,000), with an option to opt out.
• Limits on certain accounts: Accounts that have not undergone enhanced verification may face limits on annual incoming credits (for example, ₹25 lakh) to curb misuse as 'mule' accounts.
• Customer-controlled safeguards: Users may be given options such as switching digital payments on/off, setting limits, and activating a 'kill switch' to block all digital transactions instantly.
These measures are part of a broader effort to strengthen digital payment safety.
2. How Serious Is the Fraud Problem? Is This Really Needed?
The scale of digital payment fraud has increased sharply in recent years. According to RBI’s discussion paper, reported fraud cases rose from about 260,000 in 2021 to 2.8mn (million) in 2025, while the value involved increased from ₹551 crore to ₹22,931 crore.
A large proportion of these are authorised push payment (APP) frauds, where individuals are manipulated into transferring money themselves. Since such transactions are authorised by the user, recovery is difficult and often time-consuming.
These trends indicate a genuine need to strengthen safeguards, particularly for such frauds.
3. Is RBI Going Too Far? Do Other Countries Do This?
Similar safeguards exist in other jurisdictions, though the design varies.
In the UK, banks can delay certain suspicious payments for up to 72 hours. Singapore has introduced cooling-off periods for high-risk actions and also provides customers with a ‘kill switch’ to block transactions. Some banks in Australia have also introduced additional confirmation steps and transaction controls.
In comparison, RBI’s proposal for a one-hour delay appears relatively short. However, the effectiveness and impact of such measures depend on how they are implemented and targeted.
4. Will Everyday UPI Transactions, such as Food Delivery or Taxi Payments, Be Affected?
Unlikely, in most cases. The proposed delay applies primarily to account-to-account transfers (APP transactions) above a specified threshold. The discussion paper indicates that the following are expected to remain unaffected:
• Merchant payments (such as paying for shops, restaurants, or apps)
• Bill payments and utility payments
• Recurring payments such as equated monthly instalments (EMIs) and mandates
• Transactions to previously trusted or whitelisted beneficiaries
As a result, most routine, low-value digital payments are likely to continue as before.
5. Is Fraud Mainly Affecting Senior Citizens? Why Target Them?
Digital fraud affects users across all age groups. However, certain segments, including senior citizens, may be more vulnerable in specific situations, particularly in cases involving impersonation or high-pressure tactics.
RBI notes that such groups may face higher losses per incident, even though comprehensive age-wise fraud data is not publicly available. The targeted safeguards for individuals aged 70+ are, therefore, based on a risk-based approach rather than precise statistical segmentation.
At the same time, the broader measures such as transaction delays, apply more widely and are not limited to any one group.
6. Does Requiring a ‘Trusted Person’ Approval for Seniors Reduce Their Independence?
This is a valid concern. The proposed framework includes an opt-out provision, allowing individuals who do not wish to use this safeguard to choose not to. In that sense, it is designed as a protective mechanism rather than a mandatory restriction.
However, the practical impact will depend on how easily users can opt out. If the process is cumbersome, for example, requiring branch visits or extensive documentation, the optional nature of the safeguard may be diluted.
RBI itself has acknowledged potential operational and legal challenges with this approach, indicating that these concerns are part of the ongoing consultation.
7. Don’t we already have safeguards such as limits on new beneficiaries?
Yes, several safeguards are already in place. These include limits on transfers to newly added beneficiaries, two-factor authentication and customer-controlled transaction settings.
However, these measures do not fully address APP fraud. Fraudsters often adapt by convincing victims to add their accounts in advance, so that when the actual fraud occurs, the transaction appears legitimate within the system.
The proposed time delay is intended to address this gap by introducing a pause after a transaction is initiated, allowing users an opportunity to reconsider or cancel.
8. Will a one-hour delay actually stop fraud?
It may help in certain types of fraud, but not all. RBI’s reasoning is behavioural: many scams rely on creating urgency and pressure, pushing victims to act quickly without verification. A delay can interrupt this process and provide time to pause, check or seek advice.
However, in cases involving prolonged manipulation, such as so-called “digital arrest” scams, where victims are influenced over hours or days, a short delay may have limited impact.
The measure is therefore better seen as a partial safeguard, not a complete solution.
9. Can Fraudsters Bypass the Delay by Splitting Transactions into Smaller Amounts?
This is a recognised risk. Splitting a large transaction into multiple smaller ones below the threshold could potentially bypass a delay mechanism.
However, RBI’s approach is not limited to a single measure. The discussion paper also refers to broader efforts, including the development of a digital payment intelligence platform (DPIP) that uses advanced analytics to identify suspicious patterns, including transaction structuring.
The effectiveness of the system will depend on how these different layers work together.
10. Will This Reduce Fraud or Just Make Payments More Inconvenient?
The impact is likely to vary. For quick, high-pressure scams, a delay could give users a meaningful window to pause and avoid mistakes. For routine transactions, especially those already exempted, the impact may be limited.
However, some users, particularly those making frequent high-value person-to-person transfers, may experience added friction.
Overall, the proposals aim to balance fraud prevention with ease of use. Their success will depend on calibration, such as thresholds, exemptions and implementation, and on how they interact with other measures, including improved detection systems.
A Consultation, Not a Final Decision
It is important to note that these are proposals, not final regulations. RBI has invited public feedback on multiple aspects, including thresholds, exemptions and implementation design.
The outcome will likely depend on how stakeholders including users, respond during this consultation process.
RBI has invited public comments on these proposals until 8 May 2026. Readers who wish to share their views can submit feedback through RBI’s “
Connect 2 Regulate” platform.
I goy a survey from Moneylife about the propoal but survey questions itself are flawed:
Q3: Given the ?5,000 per-transaction cap and 24-hour beneficiary cooling period already in place, how adequate do you find the current system for protecting against fraud?
- this statement is incorrect as my banks (ICICI, SBI) allow upto Rs 5Lakh transfer after 30 minutues in 24/48 hour window.
"Q5. At what transaction amount, if any, would a delay feel reasonable to you?"
- The options in survey do not mention RBI proposal of Rs 10,000, rather Moneylife starts from Rs 25k. Rs 10,000 is reasonable limit and should have been kept in the option.
"Q5. At what transaction amount, if any, would a delay feel reasonable to you?"
- The options in survey do not mention RBI proposal of Rs 10,000, rather Moneylife starts from Rs 25k. Rs 10,000 is reasonable limit and should have been kept in the option.