India’s digital payments ecosystem has grown at a very fast pace, but the sharp rise in online frauds is forcing a rethink on how instant payments should be. The Reserve Bank of India (RBI) has proposed a set of measures that introduce calibrated friction into high-risk transactions—aimed at giving users more control and time to prevent fraud.
For consumers, these measures could mean a slight shift in how digital payments are experienced. High-value transactions may no longer be instantaneous, and additional checks could come into play in certain situations. However, these measures also provide greater control, more time to act, and stronger protection against fraud. However, these measures also provide greater control, more time to act, and stronger protection against fraud.
At the heart of the proposals is a simple idea -- slow down suspicious or high-value transactions just enough to stop scams, without disrupting everyday payments.
Cooling-off period for high-value transfers
The RBI has proposed a mandatory delay of up to one hour for digital transactions above Rs 10,000. This would apply to authorised push payments—where users themselves initiate the transfer, often under pressure from fraudsters.
The idea is to create a cooling-off window during which the transaction can still be cancelled. Fraudsters typically rely on urgency and psychological manipulation to push victims into acting quickly. By introducing a pause, the central bank hopes to break that chain and give users time to reassess.
For consumers, this means that while smaller, routine payments will remain instant, larger transfers may take slightly longer—but with the added benefit of a safety net.
Extra layer of protection for vulnerable users
Recognising that certain sections are more prone to fraud, the RBI has proposed additional safeguards for senior citizens and persons with disabilities. For transactions above Rs 50,000, these users may be required to get approval from a trusted individual nominated by them.
This trusted person framework is designed to counter scams involving impersonation or coercion, where fraudsters pose as family members, officials, or service providers. By adding a second layer of human verification, the RBI aims to reduce the chances of large financial losses in such cases.
While this could introduce some delay in executing high-value payments, it significantly strengthens protection for vulnerable customers.
Tighter scrutiny of bank accounts to curb mule activity
Another key proposal targets the misuse of bank accounts as conduits for laundering fraud proceeds. The RBI has suggested capping annual credits at around Rs 25 lakh for accounts that have not undergone enhanced due diligence.
If inflows exceed this threshold, the excess amount could be treated as shadow credit—held back until the bank verifies the legitimacy of the transaction. If satisfactory proof is not provided within a specified time, the funds may be reversed.
For genuine users, this could mean additional documentation in case of unusually high inflows. But the broader aim is to choke the network of mule accounts that enable large-scale fraud.
Customer-controlled security and a universal kill switch
Perhaps the most user-centric proposal is the expansion of customer-driven controls across all digital payment channels. Users may soon be able to switch payment modes on or off, set transaction limits, and even activate a kill switch to instantly disable all digital transactions in case of suspected fraud.
This brings to other payment systems the kind of controls already available for cards, empowering customers to respond quickly in emergency situations. In a fraud scenario, speed of response is critical—and a single-point shutdown mechanism could help prevent further losses.
The RBI’s proposals come against the backdrop of a surge in digital frauds, particularly those involving social engineering where users are tricked into authorising payments themselves. With instant payment systems leaving little room for recovery, preventive safeguards are becoming essential.