The digital payments ecosystem could soon see a structural shift as the Reserve Bank of India moves to tighten safeguards against rising online fraud. In a discussion paper titled ‘Exploring safeguards in digital payments to curb frauds’, the RBI has proposed introducing a mandatory cooling-off period of up to one hour for certain high-value digital transactions.
Under the proposal, fund transfers exceeding ₹10,000 through real-time payment systems such as UPI and IMPS would be subject to a delay before completion. As per the discussion paper, the measure is primarily aimed at person-to-person (P2P) transfers. Payments made to verified merchants are expected to remain unaffected.
The RBI has also proposed a whitelisting mechanism that would allow users to pre-approve trusted beneficiaries. Payments made to such beneficiaries will bypass the cooling period.
Combatting digital payment frauds
The RBI’s discussion paper also mentioned about the increasing digital frauds in the country. Data from the National Cyber Crime Reporting Portal (NCRP) showed that reported cases have increased tenfold over the past four years. The total value involved has also escalated dramatically, rising from ₹551 crore in 2021 to ₹22,931 crore in 2025.
The RBI noted that transactions above ₹10,000 account for around 45% of fraud cases by volume but represent nearly 98.5% of the total value lost. Most of these frauds fall under what is known as Authorised Push Payment (APP) fraud. In such frauds, users are manipulated into transferring money themselves rather than systems being technically breached.
Fraudsters often rely on urgency, impersonation and psychological pressure to push victims into making instant payments. “Introducing a lag at the payer’s end breaks the fraudster’s psychological control,” the RBI said in the paper.
Other safeguards proposed by RBI
In addition to the cooling-off period, the RBI has proposed several other measures to further strengthen safeguards. One proposal recommends that individuals aged 70 and above, as well as persons with disabilities, nominate a “trusted person” whose authentication would be required for transactions exceeding ₹50,000. The central bank noted that this threshold covers nearly 92% of the total fraud value reported.
Another proposal seeks to cap annual aggregate credits into individual and small business accounts at ₹25 lakh. Funds exceeding this limit would be treated as “shadow credit” and held temporarily until the account holder verifies their legitimacy. If no justification is provided within 30 days, the amount would be returned to the sender.
Additionally, the RBI has proposed introducing a “kill switch” feature, allowing users to instantly disable all digital payment channels linked to their account in case of suspected fraud.
Stakeholders have been invited to submit their feedback on the proposals by May 8, through the RBI’s Connect 2 Regulate portal. Based on the responses, the central bank is expected to finalise draft guidelines.