In a move to tackle rising digital payment frauds, Reserve Bank of India (RBI) has proposed a 1-hour delay for transactions above ₹10,000 in a discussion paper released on Thursday.
The proposal aims to introduce a cooling-off period for authorised push payments (APPs), allowing customers to cancel transactions within 1 hour before funds are credited to the beneficiary. During this time, banks can flag suspicious activity and alert users before final processing.
The central bank has invited public feedback on the paper until May 8, after which it may issue draft guidelines.
The proposal comes as transactions above ₹10,000 account for 45% of fraud cases by volume and 98.5% by value. While the delay may slow fund movement, it is expected to reduce fraud risks significantly.
Certain transactions will be exempt, including merchant payments, recurring payments, and cheque payments, as these already undergo due diligence. The RBI has also suggested a “whitelisting” feature, allowing users to approve trusted beneficiaries and bypass the delay.
For vulnerable groups, including individuals above 70 years and differently abled users, an added layer of protection is proposed. A “trusted person” can be designated to authenticate transactions above ₹50,000. Any changes to this setup will require a 24-hour cooling period, and opting out will also involve a 24-hour wait.
To curb misuse of bank accounts, the RBI has proposed aligning incoming funds with a customer’s verified financial profile under KYC norms. Accounts without enhanced due diligence may face an annual inflow cap of ₹25 lakh. Transactions beyond this limit will be held temporarily and released only after verification or reversed if found suspicious.
The measure will apply to individual, joint, sole proprietorship, and partnership accounts, including LLPs, while excluding companies, listed entities, and government accounts.
The paper also suggests expanding customer-controlled safeguards across digital payments. Users may be able to set transaction limits across channels and enable or disable payment modes.
Additionally, a unified “kill switch” is proposed, allowing users to instantly disable all digital payment activity. Re-enabling services would require strong authentication or a physical bank visit.
The RBI is also considering whether digital payment features should be disabled by default for new users unless explicitly activated.
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