Against the backdrop of rising digital financial fraud in India, the Reserve Bank of India (RBI) has signaled its intent to take stringent measures. To safeguard the funds of common citizens from the clutches of fraudsters, the central bank is now considering imposing a 'time lag'—specifically, a mandatory delay—on large-value digital transactions. The RBI has released a discussion paper regarding this initiative and has invited objections and suggestions from the public until May 8.
A 1-Hour Wait for Transactions Over ₹10,000
According to the RBI's proposal, a one-hour delay will be applied to transactions amounting to ₹10,000 or more, whether executed via UPI, cards, or net banking.
- Rationale: Fraudsters often exert psychological pressure on customers, coercing them into transferring funds in haste. This one-hour delay will provide customers with adequate time to pause and reflect; if a transaction appears suspicious, they will have the opportunity to cancel it.
- Exemptions: Transactions involving e-mandates (automatic bill payments debited directly from an account) and checks have been exempted from this rule.
- Whitelist Facility: If you frequently need to send money to a specific individual (whom you know well, such as your spouse, parent or child), you can add them to a 'whitelist.' The one-hour delay rule will not apply to transactions made to individuals included in this whitelist. However, do not add strangers to this list.
Special Protection Shield for Senior Citizens
To protect senior citizens—specifically those over the age of 70—and persons with disabilities from financial fraud, the RBI has proposed even stricter regulations.
- 24-Hour Delay: applicable for transactions amounting to ₹50,000 or more.
- Trusted Person: A provision will be made to designate a 'trusted person' for such 'sensitive' customers. The consent of this individual will be mandatory for the final approval of large-value transactions, thereby reducing the likelihood of fraud.
The Major Responsibility Now Rests on Banks
According to data from the NCRP portal, 92 percent of the total amount lost to fraud is associated with large-value transactions.
- Consequently, it will be mandatory for banks to clearly apprise customers of the associated risks before executing such large transactions.
- Furthermore, if a business account receives annual deposits exceeding ₹25 lakh, additional documentary evidence will be required.
- Previously, the RBI has also emphasized the development of compensation schemes for fraud victims, as well as the creation of AI-based mechanisms.
Once these new regulations are implemented, the security of digital transactions is expected to reach an entirely new level.
