Why RBI wants to pause some of your digital payments for an hour

The Reserve Bank of India is proposing a set of changes that could slightly slow down digital payments but make them safer.

In a discussion paper released on Thursday, the central bank has suggested measures such as a one-hour delay for certain transactions, a “kill switch” to block payments, limits on suspicious accounts, and extra checks for vulnerable users. The proposals come amid a steady rise in digital payment fraud.

Fast payments, but growing risk

Digital payments in India have expanded at an “unprecedented pace” over the past decade, the RBI noted, with volumes rising 38-fold.

This growth has been backed by systems such as UPI, IMPS, and NEFT, along with safeguards such as two-factor authentication and transaction alerts.

A typical fraud today, the RBI says, “may not involve technical compromise of systems” but instead relies on social engineering, coercion or impersonation—where users themselves end up authorising transactions.

Because payments are instant, “the scope for timely intervention and recovery of funds becomes limited”.

28 lakh fraud cases worth ₹22,931 crore in 2025

24 lakh cases worth ₹22,848 crore in 2024

13.1 lakh cases worth ₹7,465 crore in 2023

A one-hour delay for high-value transfers

For transactions above ₹10,000:

• A one-hour delay may be introduced.

• The amount will be provisionally debited.

• Customers can cancel the transaction during this period.

• The delay could be applied at the payer’s end, the payee’s end, or both.

The RBI says such transactions account for about 45% of fraud cases by volume but nearly 98.5% by value, which is why the focus is on higher-value payments.

Fraudsters often rely on “creating urgency and maintaining continuous psychological pressure”. A pause gives users time to step back and gives banks a chance to flag unusual activity.

‘Kill switch’ to block all digital payments

The RBI has also proposed a single-step ‘kill switch’ that would allow customers to disable all digital payments in their accounts instantly.

• It would override all existing settings.

• It can be activated quickly in case of suspected fraud.

• Re-activation would require proper verification or even a branch visit.

Alongside this, users may get broader controls, such as switching specific payment modes on or off and setting transaction limits.

Extra protection for vulnerable users

"The enhanced safeguard mechanism can be in the form of a “trusted person” designated by a vulnerable customer. This trusted individual acts as another layer of authentication for highvalue transactions, say, those above ₹50,000. It is noteworthy that nearly 92% of value of frauds reported in NCRP are above this limit. Thus, the threshold balances operational efficiency for smaller transactions with robust protection for larger-value transfers," the central bank noted.

These frauds often involve impersonation or fabricated emergencies and can lead to large losses. A second level of approval is meant to reduce that risk.

Limits on accounts to curb mule activity

Another proposal targets mule accounts used to route fraudulent funds.

• Limiting aggregate credits in certain accounts

• Allowing excess funds only as “shadow credits” until verified

• Reversing transactions if they remain unverified

The idea is to ensure that account activity is consistent with the customer’s profile and to prevent misuse of the banking system.

The discussion paper acknowledges a key tension. Digital payments have been designed to be fast and frictionless. But that same speed allows fraudsters to move money quickly, often before the victim realises what has happened.

The RBI has invited comments on the proposals until May 8. The measures were first flagged in the February policy statement, and the final framework will depend on feedback from stakeholders.