Daijiworld Media Network – Mumbai
Mumbai, May 12: In a significant push to curb the rising tide of online frauds, the Reserve Bank of India (RBI) has proposed a series of enhanced safeguards for digital transactions, including specific protections for senior citizens and other vulnerable users. While the measures may introduce slight delays in payments, the central bank said they are intended to make digital transactions significantly safer.
In a discussion paper released recently, the RBI has proposed measures such as a one-hour delay for certain transactions, mandatory additional authentication for vulnerable users, caps on credits into bank accounts, and a “kill switch” mechanism to instantly block digital payments.
“Over the past decade, digital payments in India have expanded at an unprecedented pace. Digital transaction volumes have increased 38-fold, while transaction values have more than tripled,” the RBI noted, underlining the rapid expansion of the ecosystem and the need for stronger safeguards against fraud.
Explaining the rationale, the central bank said the growth of digital payments through UPI, IMPS and NEFT has been supported by safeguards such as two-factor authentication and transaction alerts. However, it observed that most frauds today do not involve system breaches but rely on social engineering, impersonation or coercion, where users themselves end up authorising transactions.
The RBI further stated that the instant nature of digital payments reduces the scope for timely intervention or recovery of funds. Data from the National Cyber Crime Reporting Portal shows a sharp rise in fraud cases over the last five years.
Rising digital fraud cases in India
The RBI highlighted the following trend in fraud cases and monetary losses:
2021: 2.6 lac cases worth Rs 551 crore
2022: 6.9 lac cases worth Rs 2,290 crore
2023: 13.1 lac cases worth Rs 7,465 crore
2024: 24 lac cases worth Rs 22,848 crore
2025: 28 lac cases worth Rs 22,931 crore
“Fraudsters are deploying various tactics such as bogus call centres, deepfake-driven impersonation scams and mule account networks. Almost all sections of society, especially vulnerable groups such as senior citizens, have fallen prey to such Authorised Push Payment (APP) frauds,” the RBI said.
Safeguards for senior citizens and vulnerable users
A key proposal focuses on additional protection for senior citizens and persons with disabilities, who are increasingly targeted in digital frauds. The RBI has suggested an extra authentication layer for high-value transactions, requiring approval from a designated “trusted person.”
For transactions above Rs 50,000, authorisation from the trusted individual may be required before funds can be transferred. The central bank has also proposed a 24-hour cooling-off period for any change in the designated trusted person.
Stricter controls on bank accounts
The RBI has proposed tighter controls on bank accounts to curb misuse of mule accounts. It has suggested capping annual credits at around Rs 25 lac for accounts that have not undergone enhanced due diligence. Any inflows beyond this limit would require additional verification.
Funds exceeding the prescribed limit may be placed under “shadow credits” and released only after banks verify legitimacy. If concerns remain unresolved within around 30 days, such amounts could be reversed to the source.
User-controlled digital security features
The RBI has also proposed expanded user-controlled security features across UPI, cards and net banking. These would allow users to set limits, enable or disable payment modes, and activate a “kill switch” to instantly block all digital transactions in case of suspected fraud.
What is the 'kill switch'?
The proposed ‘kill switch’ would allow users to disable all digital payment services linked to their account instantly. Reactivation would require authentication through digital channels or a physical visit to a bank branch.
Following stakeholder feedback on the proposal until May 8, the RBI is set to issue draft guidelines for its implementation.