New Delhi: The Reserve Bank of India (RBI) is considering a proposal to introduce a one-hour delay for certain high-value Unified Payments Interface (UPI) transactions, in a move aimed at curbing the rising number of digital fraud cases in the country.
With UPI becoming the backbone of India’s digital payments ecosystem, instant money transfers have become routine for millions. However, this convenience has also made users more vulnerable to online scams. The proposed measure seeks to strike a balance between speed and security by introducing a short pause for transactions above a specified threshold.
How the proposed delay will work
Under the RBI’s proposal, account-to-account transfers exceeding Rs 10,000, particularly those made via UPI, may no longer be processed instantly. Instead, such transactions could be subject to a one-hour waiting period before the funds are credited to the recipient’s account.
During this interval, the amount will be debited from the sender’s account but held temporarily. This buffer period is intended to give users an opportunity to cancel the transaction if they realise they may have made an error or fallen victim to fraud.
Banks are also expected to utilise this time to carry out additional background checks. If a transaction appears unusual — such as transferring a large sum to a new or unverified account — users may receive alerts prompting them to reconfirm the payment. In cases where suspicious activity is detected, banks may pause or halt the transaction until further verification is completed.
Why RBI is considering this move
The central bank’s proposal comes amid a sharp increase in digital payment fraud across the country. According to RBI data, transactions above Rs 10,000 account for approximately 45 per cent of fraud cases by volume but nearly 98.5 per cent of the total financial losses.
These figures highlight the disproportionate risk associated with high-value transactions. By introducing a delay, the RBI aims to provide users with a crucial intervention window to prevent financial loss, especially in cases involving social engineering scams where individuals are manipulated into authorising payments.
Extra safeguards for elderly and vulnerable users
The proposal also places special emphasis on protecting vulnerable sections of society. For customers aged 70 years and above, as well as persons with disabilities, additional safeguards may be introduced for transactions exceeding Rs 50,000.
Such payments could require approval from a designated “trusted person” before being processed. This added layer is designed to prevent fraudsters from exploiting individuals who may be more susceptible to manipulation.
At the same time, users will likely have the option to opt out of this requirement. However, opting out may involve a waiting period along with clear risk warnings to ensure informed decision-making.
Daily transactions likely to remain unaffected
To maintain the ease of everyday digital payments, the RBI is expected to exclude routine transactions from the proposed delay system. Payments made to merchants, automatic debits such as EMIs and subscriptions, and cheque transactions are likely to continue without interruption.
Additionally, users may be allowed to “whitelist” trusted beneficiaries. Transfers made to these pre-approved accounts could remain instant, ensuring that frequent and legitimate transactions are not delayed.
What happens next
At present, the proposal is in the consultation stage. The RBI has invited public feedback on the measure until May 8, after which it will review the responses before making a final decision.
If implemented, the move could mark a significant shift in India’s digital payment landscape. While it may introduce a slight delay for certain transactions, the overarching goal is to enhance user safety and reduce financial fraud.
Conclusion
The RBI’s proposal to introduce a one-hour delay for UPI transactions above Rs 10,000 reflects a growing focus on strengthening digital payment security. As fraud risks continue to evolve, such measures could play a key role in safeguarding users without compromising the overall efficiency of the system.
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