RBI Proposes One-Hour Delay on UPI Transfers Above ₹10,000 to Combat Rising Digital Fraud.

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RBI Proposes One-Hour Delay on UPI Transfers Above ₹10,000 to Combat Rising Digital Fraud

RBI proposes a one-hour delay on UPI transactions above ₹10,000 to curb rising digital fraud. Explore key proposals, APP fraud trends, and new security measures in India.

The Reserve Bank of India (RBI) is evaluating a set of regulatory measures aimed at curbing the sharp rise in digital payment fraud across India. Among the most notable proposals is the introduction of a mandatory one-hour delay for high-value digital transfers exceeding ₹10,000. This initiative is designed to disrupt fraudsters’ ability to manipulate users into making instant transactions under pressure. Additional measures under consideration include trusted-person authentication for vulnerable groups and an emergency “kill switch” for digital payment channels.

RBI’s Proposed Measures to Strengthen Digital Payment Security

In response to escalating fraud losses, the RBI is considering a framework that could significantly alter how high-value digital payments are processed. As per a recent discussion paper released by the central bank’s Department of Payment and Settlement Systems, four key proposals have been outlined to mitigate risks in the digital payments ecosystem.

1. One-Hour Cooling Period for High-Value Transfers

The RBI has proposed that all account-to-account digital transfers exceeding ₹10,000 be subject to a mandatory one-hour delay before execution. During this cooling-off period:

Customers will have the option to cancel the transaction.
Banks may seek reconfirmation if a transaction is flagged as suspicious.
Certain transactions such as merchant payments, e-mandates, NACH transfers, and cheques will remain exempt.
Users may whitelist trusted beneficiaries to bypass the delay.

This measure directly targets fraud patterns where victims are coerced into making immediate payments via platforms like Unified Payments Interface (UPI) or IMPS.

2. Fraud Trends Justifying Regulatory Intervention

Data from the National Cyber Crime Reporting Portal (NCRP) highlights the alarming rise in digital fraud:

2021: 2.6 lakh cases involving ₹551 crore
2025: 28 lakh cases involving ₹22,931 crore

Notably, transactions above ₹10,000 account for only 45% of fraud cases by volume, but represent a staggering 98.5% of the total fraud value, making them a critical focus area for regulatory safeguards.

3. Tackling Authorised Push Payment (APP) Fraud

The RBI has identified Authorised Push Payment (APP) fraud as the dominant form of digital fraud today. In such cases, fraudsters:

Exploit social engineering tactics, impersonation, and urgency
Coerce victims into voluntarily transferring funds
Take advantage of instant payment systems where recovery is nearly impossible

The proposed delay mechanism aims to break this psychological pressure cycle, giving users time to reassess potentially fraudulent transactions.

Additional Proposals Under Consideration

Trusted Person Authentication

For individuals aged 70 years and above, as well as persons with disabilities:

Transactions above ₹50,000 may require approval from a nominated trusted person
This threshold reportedly covers nearly 92% of fraud value, enhancing protection for vulnerable groups

Annual Credit Cap with Shadow Balance Mechanism

A proposed cap of ₹25 lakh per year on incoming credits for individuals and small businesses
Funds exceeding this limit will be held as “shadow credit”
Access will be granted only after verification of transaction legitimacy
Unverified funds may be reversed after 30 days

Introduction of a Digital Payment ‘Kill Switch’

The RBI is also considering a one-step “kill switch”, enabling customers to instantly disable all digital payment channels in case of suspected fraud. Similar mechanisms are already operational in countries like Singapore and are being adopted in Australia.

Balancing Security with User Convenience

While these proposals aim to enhance user protection, the RBI has acknowledged potential trade-offs:

A mandatory delay may conflict with the core principle of instant payments
Users may experience inconvenience or confusion
Fraudsters could adapt by manipulating users into whitelisting beneficiaries

Next Steps and Public Consultation

The RBI has invited stakeholder feedback on these proposals through its Connect 2 Regulate portal. Comments can be submitted until May 8, 2026, following which draft guidelines may be issued based on industry and public input.

Conclusion

The RBI’s proposed measures signal a proactive shift towards strengthening India’s digital payment security framework. By introducing friction in high-risk transactions and enhancing user safeguards, the central bank aims to address the growing threat of digital fraud while maintaining trust in platforms like UPI.