The proposed solution is a one-hour delay for digital transactions exceeding Rs 10,000, particularly when the transfer is made to a new or unverified beneficiary.
The idea is simple -- give users a window to reconsider, detect fraud or alert their bank before the funds are irretrievably transferred.
The Reserve Bank of India has suggested a significant shift in India's digital payments architecture, proposing a one-hour 'cooling-off period' for certain high-value transactions.
This is not regulation yet but part of a discussion paper titled Exploring safeguards in digital payments to curb frauds that has been released for public feedback.
Key points
- The RBI has released a discussion paper -- not a binding regulation -- seeking public feedback on measures to curb rising digital payment frauds.
- A key proposal is a one-hour 'cooling-off period' for digital transactions above Rs 10,000, especially for transfers to new or unverified beneficiaries.
- The RBI aims to counter scams such as impersonation calls and 'digital arrest' frauds where users are manipulated into transferring money instantly.
- Additional safeguards include whitelisting trusted beneficiaries, override options for urgent payments and stricter protections for senior citizens.
- The paper also proposes tighter monitoring of mule accounts and signals a broader shift from prioritising payment speed to enhancing user safety.
The proposals come at a time when India's real-time payments ecosystem, powered by UPI and IMPS, is increasingly being exploited by fraudsters.
The RBI's paper explicitly acknowledges that the very speed and convenience of instant payments have created vulnerabilities, particularly in cases where users are manipulated into transferring money themselves.
Why RBI wants to slow down payments
The central bank's concern revolves around a category of fraud known as Authorised Push Payment (APP) fraud.
In such cases, users are deceived into willingly sending money to scammers posing as law enforcement officials, bank representatives or even acquaintances. These scams often rely on panic tactics such as so-called 'digital arrests' or urgent threats.
According to the RBI discussion paper, once such transactions are executed, they are nearly impossible to reverse due to the instantaneous nature of current payment systems. This has led the regulator to consider introducing deliberate friction into the system.
The proposed solution is a one-hour delay for digital transactions exceeding Rs 10,000, particularly when the transfer is made to a new or unverified beneficiary.
The idea is simple -- give users a window to reconsider, detect fraud or alert their bank before the funds are irretrievably transferred.
Balancing security with convenience
Recognising that India's economy relies heavily on fast and seamless payments, the RBI has proposed safeguards to prevent disruption. Users would be able to 'whitelist' trusted beneficiaries, ensuring that routine transactions remain instantaneous.
Additionally, the system may allow users to override the delay in genuinely urgent situations but with additional layers of authentication. Recurring payments such as subscriptions, EMIs and mandated debits are also expected to remain unaffected.
This reflects a nuanced approach; rather than dismantling instant payments, the RBI is attempting to selectively introduce friction where the risk of fraud is highest.
Special protection for senior citizens
The discussion paper also highlights that older individuals are disproportionately affected by digital fraud. To address this, the RBI has proposed even stricter safeguards for senior citizens.
Transactions above Rs 50,000 initiated by users aged 70 and above could face a delay of up to 24 hours. Moreover, these users may be allowed to designate a trusted individual, such as a family member, to act as a secondary approver before funds are released.
This proposal reflects a growing recognition that financial security measures must be tailored to vulnerable segments of the population.
Crackdown on mule accounts
Beyond transaction-level controls, the RBI is also targeting the ecosystem that enables fraud. The paper discusses measures to curb the use of 'mule accounts' -- bank accounts used to receive and transfer illicit funds.
Among the ideas under consideration are limits on annual credits into accounts without sufficient proof of legitimate activity as well as enhanced monitoring and due diligence requirements.
These steps aim to disrupt the flow of stolen money through the banking system.
A shift in India's payment philosophy
If implemented, the RBI's proposals would mark a fundamental shift in India's approach to digital payments.
Since the launch of UPI in 2016, the focus has been on speed, convenience and round-the-clock availability. The discussion paper signals a new priority -- safety over speed. By introducing controlled delays in high-risk scenarios, the RBI is effectively acknowledging that friction can serve as a protective feature rather than a drawback.
Still a proposal, not policy
It is crucial to emphasise that these measures are not yet in force. The RBI has released them as part of a consultation process and has invited feedback from stakeholders until May 8, 2026.
The final framework, if adopted, may differ significantly from the current proposals. However, the direction is clear -- as digital payment adoption deepens, regulators are preparing to recalibrate the system to counter increasingly sophisticated frauds.
In essence, the RBI's discussion paper is an early blueprint for the next phase of India's digital payments journey -- one where speed is balanced with security in an effort to protect millions of users from evolving financial scams.
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