The Reserve Bank of India (RBI) is considering a new measure to enhance security in digital transactions. In light of increasing incidents of digital financial fraud, the RBI has proposed a one-hour delay for processing authorized push payment (APP) transfers of ₹10,000 or more. This initiative aims to provide a safeguard against fraud by giving users time to reconsider their transactions.
As outlined in the discussion paper titled “Exploring safeguards in digital payments to curb frauds,” the RBI is seeking feedback on these proposals until May 8. The suggested delay would apply to various forms of payments, including UPI, cards, and net banking, while recurring payments such as e-mandates and cheque transactions may be exempt.
Why it matters: The RBI believes that this delay could disrupt the psychological tactics used by fraudsters, allowing victims to reassess their decisions before finalizing transactions.
For urgent transactions, the RBI plans to offer an option for payers to bypass the delay by explicitly authorizing the transaction, potentially through a whitelisting mechanism. This could allow payments to trusted payees to proceed without the imposed time lag.
Additionally, for APP transactions exceeding ₹50,000, a 24-hour delay is proposed specifically for customers aged 70 and above. These vulnerable individuals would have the option to designate a trusted person to assist in overseeing their transactions, adding an extra layer of security.
The RBI's analysis indicates that a significant portion of reported frauds involves individuals over this age threshold, emphasizing the need for enhanced protective measures for this demographic.
Next steps: Should these proposals be enacted, banks will be required to inform customers about the associated risks of delayed transactions, ensuring that users can make informed choices.
Furthermore, the RBI is contemplating a cap of ₹25 lakh for annual aggregate credits into bank accounts without requiring additional proof from customers for higher amounts. This move aims to streamline the verification process while maintaining security.
These initiatives are part of the RBI's broader strategy to fortify the digital payments landscape. Earlier this year, the central bank also introduced draft guidelines for a compensation scheme to reimburse consumers affected by digital fraud, covering up to 85% of lost amounts or ₹25,000, whichever is lower.
In a related effort, the RBI is developing an AI-powered platform to detect suspicious online transactions, reflecting its commitment to enhancing security in the digital payment ecosystem.
