Inside RBI’s Plan To Curb Rising Digital Payment Fraud
April 12, 2026
RBI proposes a cooling-off period, a kill switch, and stricter checks to curb rising digital payment fraud. Additionally, the central bank is seeking public feedback till May 8, 2026., Economy, Times Now
RBI has proposed some changes in the digital payment ecosystem to curb frauds. (File Photo)
The Reserve Bank of India has released a discussion paper outlining a series of potential safeguards in an effort to tackle the surge in digital payment fraud. The public can give their feedback on these proposed changes until May 8, 2026. One of the most notable suggestions is a one-hour cooling-off period for account-to-account transfers exceeding Rs 10,000. This would apply to individuals, sole proprietors, and partnership firms, segments that currently lack any chargeback facility in case of fraudulent transactions.
The delay could be enforced at the sender’s end, the recipient’s end, or even both, depending on implementation.
The Rs 10,000 threshold has been chosen carefully. Data from the National Cyber Crime Reporting Portal shows that such transactions account for nearly 45 per cent of fraud cases by volume and an overwhelming 98.5 per cent of the total value involved.
Extra Protection For Vulnerable Users
The central bank has also turned its attention to safeguarding high-risk groups such as senior citizens and persons with disabilities. For transactions exceeding Rs 50,000, an added layer of verification has been proposed. This could include approval from a pre-designated trusted individual before the payment is processed.
This recommendation is backed by data indicating that nearly 92 per cent of fraud losses by value occur in transactions above this level. Many of these cases are linked to impersonation tactics and social engineering scams, making additional verification a critical safeguard.
Another key aspect of the proposal is empowering customers with greater control over their banking activities. Users may soon be able to enable or disable specific payment channels, set personalised transaction limits, and even activate a “kill switch” to instantly block all digital transactions.
This emergency feature could be made accessible through multiple channels, including mobile banking apps, internet banking platforms, bank branches, and IVR systems, ensuring quick action during suspected fraud.
Crackdown On Mule Accounts And Rising Fraud
To address the growing misuse of bank accounts, often termed mule accounts, the RBI has suggested capping annual credits at Rs 25 lakh for accounts that have not undergone enhanced due diligence. Accounts requiring higher transaction limits would need to furnish additional verification related to their business operations and funding sources.
These measures come amid a sharp rise in both digital payments and fraud incidents. Over the past decade, digital transactions have expanded at a compound annual growth rate of 53 per cent. At the same time, reported fraud cases have surged dramatically, from 2.6 lakh in 2021 to 28 lakh in 2025. The total value involved has also skyrocketed, jumping from Rs 551 crore to nearly Rs 22,931 crore.
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The Reserve Bank of India has released a discussion paper outlining a series of potential safeguards in an effort to tackle the surge in digital payment fraud. The public can give their feedback on these proposed changes until May 8, 2026. One of the most notable suggestions is a one-hour cooling-off period for account-to-account transfers exceeding Rs 10,000. This would apply to individuals, sole proprietors, and partnership firms, segments that currently lack any chargeback facility in case of fraudulent transactions.
The delay could be enforced at the sender’s end, the recipient’s end, or even both, depending on implementation.
The Rs 10,000 threshold has been chosen carefully. Data from the National Cyber Crime Reporting Portal shows that such transactions account for nearly 45 per cent of fraud cases by volume and an overwhelming 98.5 per cent of the total value involved.
Extra Protection For Vulnerable Users
The central bank has also turned its attention to safeguarding high-risk groups such as senior citizens and persons with disabilities. For transactions exceeding Rs 50,000, an added layer of verification has been proposed. This could include approval from a pre-designated trusted individual before the payment is processed.
This recommendation is backed by data indicating that nearly 92 per cent of fraud losses by value occur in transactions above this level. Many of these cases are linked to impersonation tactics and social engineering scams, making additional verification a critical safeguard.
Another key aspect of the proposal is empowering customers with greater control over their banking activities. Users may soon be able to enable or disable specific payment channels, set personalised transaction limits, and even activate a “kill switch” to instantly block all digital transactions.
This emergency feature could be made accessible through multiple channels, including mobile banking apps, internet banking platforms, bank branches, and IVR systems, ensuring quick action during suspected fraud.
Crackdown On Mule Accounts And Rising Fraud
To address the growing misuse of bank accounts, often termed mule accounts, the RBI has suggested capping annual credits at Rs 25 lakh for accounts that have not undergone enhanced due diligence. Accounts requiring higher transaction limits would need to furnish additional verification related to their business operations and funding sources.
These measures come amid a sharp rise in both digital payments and fraud incidents. Over the past decade, digital transactions have expanded at a compound annual growth rate of 53 per cent. At the same time, reported fraud cases have surged dramatically, from 2.6 lakh in 2021 to 28 lakh in 2025. The total value involved has also skyrocketed, jumping from Rs 551 crore to nearly Rs 22,931 crore.
Get Latest News Live on Times Now along with Breaking News and Top Headlines from Business, Economy and around the World.
Latest News
Priya Raghuvanshi author
She is working as a Chief Copy Editor at Times Now’s Business Desk, where she covers key developments in the stock market, Indian corporates across se ... View More
News
Business
Economy
End of Article