RBI plans 1-hour delay on high-value UPI payments to curb rising digital fraud

The Reserve Bank of India (RBI) has proposed introducing a one-hour delay for digital transfers above Rs 10,000, alongside enhanced safeguards for senior citizens and tighter scrutiny of suspicious accounts, as it looks to tackle a sharp rise in online fraud, a ‌discussion paper released on Thursday showed.

The proposal reflects growing concern within the central bank over the changing nature of digital fraud, where victims are increasingly manipulated into authorising payments themselves.

How the proposed payment lag will work

At the core of the RBI’s plan is a rethink of how instant payments function.

For account-to-account transfers above Rs 10,000—particularly those routed through systems like the Unified Payments Interface (UPI)—the central bank has suggested a one-hour lag before funds are credited to the recipient.

During this window, the amount would be provisionally debited from the sender’s account but not immediately transferred. This creates a buffer period in which users can cancel the transaction if they realise something is wrong.

Banks would simultaneously use this time to run real-time checks. If a transaction appears unusual, such as a large transfer to a new or unverified account, customers may receive alerts or prompts asking them to reconfirm the payment before it is processed.

Extra safeguards for elderly and vulnerable users

Recognising that certain sections of society are more vulnerable to fraud, the RBI has proposed an additional layer of protection for elderly and differently-abled users.

Customers aged 70 and above, as well as persons with disabilities, may be required to route high-value transactions above Rs 50,000 through a “trusted person” for added authentication.

The central bank noted that such users are often targeted by social engineering scams, which can result in disproportionately higher financial losses. At the same time, customers would retain the option to opt out of this safeguard, subject to a cooling-off period and appropriate risk disclosures.

More control for users: Kill switch

The discussion paper also emphasises giving customers greater control over their digital banking activity.

Among the measures under consideration are account-level transaction limits across payment modes and a unified “kill switch” that would allow users to instantly disable all digital transactions in case of suspected fraud.

Reactivating these services would require stringent verification, ensuring that compromised accounts cannot be easily misused again.

Tighter checks on suspicious accounts

Beyond individual transactions, the RBI has also focused on the broader ecosystem enabling fraud.
It has proposed closer monitoring of bank accounts that receive unusually large credits, particularly those suspected to be mule accounts used to channel illicit funds.

Such accounts could face limits on annual inflows unless enhanced due diligence is carried out. Funds exceeding these thresholds may be temporarily held until verified, adding another layer of defence against fraudulent networks.

Fraud surge driving the move

The RBI’s proposal comes against the backdrop of a sharp spike in digital payment frauds in India.

Data cited in the discussion paper shows reported cases have risen more than tenfold between 2021 and 2025, while the total value of losses has surged nearly forty times to about Rs 230 billion.

A significant portion of these cases involve authorised push payment scams, where users are deceived through phishing calls, fake customer care interactions or even deepfake impersonations into transferring money themselves.

The proposed delay is aimed at introducing a pause in such situations, allowing users time to reassess and potentially stop fraudulent transfers.

Exemptions to protect everyday transactions

The central bank has sought to ensure that routine payments remain unaffected.

Merchant payments, recurring transactions such as subscriptions or EMIs, and cheque-based transfers are expected to be exempt from the proposed delay, as these already operate within established verification frameworks.

This selective approach is intended to minimise disruption while focusing safeguards on higher-risk transactions.

Balancing speed with security

India’s digital payments ecosystem—driven by platforms like UPI—has been built on speed and convenience, becoming integral to daily transactions.

However, the RBI’s proposals signal a clear shift towards prioritising security, especially for high-value and high-risk transactions. Introducing even a limited delay marks a departure from the principle of instant payments, but one that may be necessary as fraud risks evolve.

The central bank has invited public feedback on the proposals until May 8 and will review responses before issuing draft guidelines. If implemented, the measures could mark a significant evolution in India’s digital payments framework, balancing convenience with stronger safeguards against fraud.