The Reserve Bank of India (RBI) has released a comprehensive discussion paper proposing methods to prevent digital payment frauds in the country. As per reports, frauds have surged from ₹551 crore in 2021 to ₹22,931 crore in 2025.
Digital fraud in India in 2026 is reaching critical levels, driven by rapid UPI adoption, with reports of nearly 25 lakh incidents in 2025 and losses exceeding ₹9,800 crore. Cyber crime complaints surged over 8,600% between 2019 and 2024, with 2025 seeing ~25 lakh cases, a notable increase from 22.68 lakh in 2024. As of January 2026, over 27.37 lakh Level 1 mule accounts, used to launder money, were identified by the Suspect Registry.
There is ongoing pressure on the government to prevent digital fraud, as it leads to significant monetary losses for citizens. The RBI has now released a discussion paper and highlighted 4 important points.
The discussion paper mentions 4 important methods:
1. One-Hour “Lag” for High-Value Transfers: The RBI is planning to introduce a one-hour delay for bank transfers above ₹10,000. This means that if you send a high-value amount, the money will not be transferred instantly but will be processed after one hour. This time gap, called a “golden hour,” is meant to help people in case they realize they have made a mistake or are being scammed, giving them a chance to cancel the transaction. This rule will apply to individuals, sole proprietors, and partnership firms. However, it will not apply to merchant payments, such as shopping transactions, or to automatic and recurring payments like EMIs and subscriptions.
2. “Trusted Person” Authentication for Vulnerable Citizens: The RBI is planning to introduce a “trusted person” safety feature to protect senior citizens from fraud. Under this proposal, if a person aged 70 or above, or a person with disability, tries to make a transaction above ₹50,000, an additional approval will be required from a trusted person chosen by them. This trusted person will act as an extra layer of security to confirm that the transaction is genuine. The main aim of this step is to prevent scams and ensure that such individuals do not lose money due to fraud or pressure.
3. Ceiling on Annual Credits to Curb “Mule” Accounts: The RBI is planning to set a limit of ₹25 lakh per year on the total money received in certain bank accounts that have not been properly verified. This step is aimed at stopping the misuse of “mule accounts,” which are often used for illegal activities. If the total money coming into such an account crosses ₹25 lakh in a year, the extra amount will not be immediately available. Instead, it will be kept as “shadow credit” until the bank checks and confirms that the transactions are genuine. This rule will help banks detect suspicious activity and prevent fraud.
4. Universal “Kill-Switch” for Digital Access: The RBI is planning to introduce a “kill-switch” feature that will allow customers to quickly block all digital payment services in one step. This means if someone suspects fraud or unauthorized activity in their account, they can instantly disable services like UPI, debit/credit cards, and net banking. This will help prevent further loss of money. Once everything is blocked, the services can only be activated again after proper verification, such as visiting the bank branch or completing a strict security check. This feature is designed to give customers more control and safety during emergencies.
