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The has proposed sweeping measures to combat rising digital payment frauds, including a one-hour lag for account-to-account transfers exceeding ₹10,000 on fast payment networks like the . The discussion paper also suggests an optional "trusted person" approval system for high-value transactions made by senior citizens and differently-abled individuals.
The Reserve Bank of India derives its authority to regulate and supervise payment platforms from the Payment and Settlement Systems Act, 2007. While the Unified Payments Interface revolutionized the economy through instant, interoperable fund transfers, this speed has inadvertently benefited fraudsters. The proposed one-hour lag for peer-to-peer transfers above ₹10,000 introduces a cooling-off period, allowing users to reverse unauthorized transfers before the money reaches a mule account. Importantly, this lag will feature a provisional debit to prevent double-spending, and it deliberately exempts merchant payments to ensure that retail trade and daily commerce are not disrupted. For UPSC, understanding this delicate balance between financial inclusion, transaction friction, and systemic risk mitigation is crucial.
Cybercrimes have emerged as a primary internal security challenge, with digital payment frauds jumping 10-fold to 2.8 million cases between 2021 and 2025. This data, tracked by the National Cyber Crime Reporting Portal under the Ministry of Home Affairs, highlights the growing sophistication of financial crimes. Fraudsters increasingly rely on social engineering, deploying deepfake impersonations and organized fake call centers to manipulate victims. Once stolen, funds are rapidly funneled through a network of mule accounts (bank accounts used to launder illicit money), making recovery almost impossible. The RBI's proposal for a "kill switch" that instantly disables all digital payments empowers citizens to respond immediately to a breach, aligning with the broader national goal of building cyber resilience.
The RBI’s targeted focus on citizens aged 70 and above, along with differently-abled individuals, reflects a nuanced understanding of digital vulnerability. Scammers disproportionately target the elderly using high-pressure tactics, exploiting gaps in digital literacy and cognitive decline. The proposal to mandate a "trusted person" to approve transactions above ₹50,000 for these cohorts effectively crowdsources security to trusted family members or friends. However, by allowing users to opt out of this safety mechanism, the RBI balances protective state paternalism with individual autonomy and financial independence. This approach serves as an excellent case study for Mains GS-2 on designing inclusive policies that protect vulnerable populations without treating them as helpless monoliths.