Whalesbook
Banks Agree to RBI's Delay Plan
Indian banks generally agree with the Reserve Bank of India's (RBI) proposal to add a delay to high-value digital payments. This measure is intended to fight increasing fraud. The RBI's discussion paper suggested a one-hour delay for account-to-account transfers over ₹10,000, a step that has received broad support in principle from banks.
Lobbying for a Higher Threshold
However, banks are asking the RBI to raise the proposed limit. They want the threshold increased from ₹10,000 to ₹25,000. Banks believe this higher limit would better balance security needs with the practicalities of digital transactions. They are concerned that the ₹10,000 cap could unfairly impact legitimate payments and cause unnecessary disruption.
Surge in Digital Payment Fraud
Digital payment fraud has surged alarmingly. The value of fraudulent incidents has risen about 41 times in the past five years, reaching nearly ₹23,000 crore. According to RBI data, payments over ₹10,000 make up about 45% of fraud cases by number of transactions and an enormous 98.5% by value. This clearly shows the urgent need for effective measures against fraud.
Banks Raise Operational Issues, RBI Seeks Feedback
Banks have also pointed out operational issues, such as payment delays that could extend beyond the proposed hour and the challenges of 'whitelisting' accounts. The RBI has stated that the discussion paper is an "idea floated for feedback," and the final decision will depend on responses from all parties involved. Former deputy governor T Rabi Sankar stressed that the aim is to reduce fraud, not to finalize policy at this stage.
Finding the Right Balance: Security vs. Speed
Senior bankers believe that while instant payments are best, a controlled delay might be needed to reduce risk. The key debate now is over the right threshold – whether ₹10,000 or a different amount. They recognize that observing how the system works after implementation will be crucial to finding the optimal level. The main goal is to lower risk while keeping India's fast-growing digital payment system efficient.