RBI Proposes 1-Hour Cooling-Off Period for Digital Transfers Over ₹10,000, But There's A Catch
The RBI is evaluating a proposal to introduce a mandatory one-hour delay for digital transactions exceeding ₹10,000. It is aimed at curbing the surge in cyber fraud and scams, and would allow users to cancel or report unauthorized transfers before funds are permanently moved. While the move is designed to bolster security, it is a pivot from India's push for instantaneous, 24/7 payment settlement.
- Republic Business
- 2 min read
In a discussion paper titled “Exploring safeguards in digital payments to curb frauds,” the Reserve Bank of India (RBI) suggested that any digital payment, whether via UPI, debit/credit cards, or net banking, worth ₹10,000 or more should face a one-hour processing delay.
The RBI believes this lag serves as a "preventive control." By stopping the instant transfer of funds, the regulator aims to give the payer a moment to reconsider and pull back. However, to avoid total gridlock, recurring costs like e-mandates and physical cheques would remain exempt.
The central bank acknowledged that some large payments are urgent. The RBI has proposed two bypass options:
- Users can "whitelist" or pre-approve certain trusted contacts. Payments to these people would stay instant.
- A payer may be given an option to explicitly bypass the one-hour lag for a specific, time-sensitive transaction after extra verification.
Protection For Senior Citizens
The RBI highlighted that 92% of the total value of reported fraud involves older citizens. To protect this group, it suggests a 24-hour delay for transactions over ₹50,000 initiated by those aged 70 and above.
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Under this plan, seniors could designate a trusted person, such as a family member, to act as a secondary authenticator. This person would have to review and approve the transfer before the bank releases the funds.
New Rules For Business Accounts
The crackdown extends to business banking as well. The RBI is considering a ₹25 lakh annual limit on total credits into a bank account unless the customer provides additional proof of genuine business activity. This move aims to prevent mule accounts from being used to wash stolen money.
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These proposals follow a separate RBI plan to reimburse fraud victims for up to 85% of their losses, shifting more responsibility onto banks to secure the ecosystem. The public and industry experts have until May 8 to submit their feedback on these proposed changes.
Cyber Fraud on the Rise
National Cyber Crime Reporting Portal recorded a spike in financial loss cases in the 2025-26 fiscal year. Digital payment fraud now accounts for a substantial portion of all reported white-collar crimes in India's urban centers.
The RBI has recently intensified its focus on safety-first digital banking. It previously implemented multi-factor authentication and daily limits on mobile banking. If approved, the one-hour delay would be the most significant change to India’s digital payment velocity since UPI's launch in 2016.