₹10,000+ transfers may see 1-hour lag, ‘kill switch’ planned; what RBI proposed to curb fraud

The Reserve Bank of India (RBI) has proposed a series of additional safeguards for digital payments, including a possible one-hour delay for certain transactions and a ‘kill switch’ to block accounts instantly.

In a discussion paper released on April 9, the central bank said the rapid expansion of digital payments has been accompanied by a sharp rise in frauds, particularly “authorised push payment” (APP) scams where users are tricked into initiating transactions themselves.

The RBI paper noted that digital payment volumes in India have grown 38-fold over the past decade, and so are the fraud incidents reported on the National Cyber Crime Reporting Portal, which have surged from 2.6 lakh cases in 2021 to 28 lakh in 2025.

National Cyber Crime Reporting Portal (NCRP) indicate that fraud related to digital payments is on the rise, with 28 lakh frauds reported in 2025, amounting to ₹22,931 crore, higher than 24 lakh, totalling ₹22,848 crore in 2024, 13.1 lakh worth ₹7,465 crore in 2023, according to the discussion paper.

“Fraudsters are deploying various tactics, such as bogus call centres, deepfake-driven impersonation scams and mule account networks,” the paper said.

Lagged credit for APP

Among the key proposals is the introduction of a mandatory time lag of up to one hour for digital transactions above ₹10,000 in certain cases.

The RBI said such a delay could “act as a preventive control by disrupting the fraudster’s psychological influence over the victim” and give users time to reconsider transactions.

On the possible approach to implement the plan, the regulator said that the payer’s bank would provisionally debit the customer’s account, and the payer would retain the option to cancel the transaction for any reason.

“During this period, if the payer’s bank identifies the transaction as unusual or atypical, it may seek reconfirmation from the payer, while sharing appropriate information on the nature of the suspicion and cautioning the payer,” the paper suggested.

Extra safeguards for vulnerable users

The central bank has also proposed an additional layer of authentication for high-value transactions (above ₹50,000) carried out by vulnerable groups such as senior citizens and persons with disabilities.

Under this mechanism, a “trusted person” designated by the customer would need to authenticate such transactions, adding a safeguard against coercion or impersonation frauds.

“Any change of trusted person may be permitted only after a mandatory 24-hour cooling period, thereby ensuring that such decisions are deliberate and informed,” the paper proposed.

Customers identified as vulnerable will have the option to opt out from the safeguard system after a 24-hour waiting period following their request.

“Banks are required to clearly explain the associated risks to the customer before processing such requests, thereby ensuring informed decisionmaking,” it added.

Limits on suspicious accounts

To tackle mule accounts used for routing fraudulent funds, the RBI suggested capping annual credits in certain bank accounts at ₹25 lakh unless additional verification is completed.

Transactions beyond this limit may be held as “shadow credits” until banks are satisfied about their genuineness, failing which funds could be reversed.

‘Kill switch’ and user controls

The discussion paper also proposes giving customers greater control over their accounts, including the ability to switch digital payment modes on or off and set transaction limits.

A key feature under consideration is a “kill switch” that would allow users to instantly disable all digital payment activity in case of suspected fraud.

The RBI said such tools would “strengthen the principle of customer-controlled security” and enable faster response in fraud situations.

The central bank has asked for feedback and comments on the discussion paper by May 8.