Kamal Ghorui
In a bid to curb the growing digital payment frauds, the Reserve Bank of India had put out a discussion paper proposing a range of new safeguards, including delays on certain fund transfers, added checks for vulnerable users, limits on suspect accounts, and an emergency mechanism for customers to instantly block transactions. The central bank has sought feedback on the proposals until May 8, 2026. A key recommendation is the introduction of a one-hour cooling-off period for account-to-account transfers above Rs 10,000 carried out by individuals, sole proprietors and partnership firms. These transactions currently do not offer any chargeback option in case of fraud. The proposed delay may be implemented at the sender’s end, the recipient’s end, or both. The threshold has been set at Rs 10,000 as such transfers make up around 45% of fraud cases by volume and account for nearly 98.5% of the total value involved, according to figures from the National Cyber Crime Reporting Portal. The paper also focuses on safeguarding senior citizens and persons with disabilities, according to ET. For transactions exceeding Rs 50,000, the RBI has suggested introducing an additional verification step, which may include approval from a pre-designated trusted individual. Data indicates that close to 92% of fraud losses by value occur in transactions above this level, often linked to impersonation and social engineering scams. Among other measures, the RBI has proposed giving users more direct control over their banking activity. Customers could be allowed to switch specific payment channels on or off, set their own transaction limits, and activate a “kill switch” to immediately stop all digital payments. This feature may be made available through mobile banking, internet banking, bank branches and IVR services. To tackle the misuse of bank accounts by fraudsters, commonly referred to as mule accounts, the central bank has suggested capping annual credits at Rs 25 lakh for accounts that have not undergone enhanced due diligence, the financial daily reported. Accounts requiring higher limits would need to provide further verification related to their business activities and funding sources. The proposals come at a time when both digital payment adoption and fraud incidents have risen sharply. Over the past decade, digital transactions have grown at a compound annual rate of 53%. Meanwhile, reported fraud cases have jumped from 2.6 lakh in 2021 to 28 lakh in 2025, with the total value involved increasing from Rs 551 crore to nearly Rs 22,931 crore. The surge has been driven by methods such as deepfakes, fake call centres and networks of mule accounts.
