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RBI Proposes Delay for Large Payments Amid Fraud Surge
India's central bank, the Reserve Bank of India (RBI), is considering a key step to overhaul its fast-paced digital payment system. It has proposed a one-hour delay for person-to-person (P2P) transactions exceeding ₹10,000. This proposal, outlined in a discussion paper, aims to tackle the sharp rise in authorized push payment (APP) frauds, which occur when people are tricked into sending money to scammers.
Why the Proposed 'Golden Hour'?
Authorized push payment fraud has become a major concern, causing ₹37,309 million in losses in India during 2023. These scams often exploit the instant nature of real-time payment systems like India's Unified Payments Interface (UPI), which is linked to 89% of APP scam losses. Scammers use social engineering, impersonation, and even deepfakes to create a sense of urgency, leaving victims with little chance to stop a transfer once it’s made. The RBI's proposed one-hour 'golden hour' window is designed to disrupt this urgency. For that hour, money taken from a sender's account would be held. This gives users time to check, confirm, or cancel the payment, and allows banks to identify suspicious transactions.
How the Delay Could Affect Payments and Users
The proposed delay would apply only to higher-value, potentially riskier person-to-person (P2P) transfers, not to everyday transactions like merchant payments made via QR codes or transfers under ₹10,000, which are expected to remain instant. This change introduces a delay into a system known for its speed and convenience. India's digital payments market, valued at USD 85.13 billion in 2023, has grown rapidly, largely thanks to platforms like UPI. However, the significant increase in fraud cases, rising from 2.6 lakh in 2021 to a projected 28 lakh in 2025, has led to this strategic review. This move mirrors a global effort by regulators to balance innovation with security in instant payment systems.
Potential Challenges and User Impact
While the goal of reducing fraud is commendable, the proposed delay could create challenges. This added step might frustrate users and could unintentionally slow down necessary, time-sensitive transfers between individuals. It remains to be seen how effective a one-hour window will be against sophisticated scams driven by AI, which are rapidly evolving. Although India's fintech sector is strong, with companies like Paytm and Razorpay at the forefront of innovation, such regulatory rules could slow down the agility that has fueled its growth. The RBI is also pushing for two-factor authentication (2FA) for digital payments starting April 2026, signaling a wider move towards better security. However, the delay mechanism introduces a new hurdle for users, risking it becoming a significant obstacle to the smooth adoption that has powered India's digital payment revolution.
Next Steps and Broader Security Measures
The RBI has stressed that this proposal is more than just a technical change; it's meant to be a behavioral safeguard. The proposal is now open for feedback from stakeholders until May 8, 2026, allowing for consultation before final rules are set. Other measures being considered include a 'kill switch' for users to immediately block digital payments and stronger authentication for vulnerable users, such as senior citizens. This approach shows the central bank's commitment to strengthening its digital payment system while balancing speed, convenience, and security.