In a decisive move to tackle the alarming surge in cyber fraud across the country, the Reserve Bank of India (RBI) has released a comprehensive discussion paper outlining additional safeguards for digital payments. The central bank has invited public comments and stakeholder feedback through its “Connect 2 Regulate” platform until May 8, signaling a collaborative approach to strengthening India’s financial security framework. The urgency behind these measures is underscored by data from the National Cyber Crime Reporting Portal, which recorded approximately 28 lakh cyber fraud cases in 2025 alone, involving a staggering financial loss of ₹22,931 crore. As digital transactions continue to expand rapidly, the RBI’s proposals aim to strike a balance between convenience and security, ensuring that users are better protected against increasingly sophisticated fraud tactics.
Among the key recommendations is the introduction of a mandatory one-hour cooling-off period for digital transactions exceeding ₹10,000. During this interval, the payer’s bank would provisionally debit the amount, but the customer would retain the flexibility to cancel the transaction without penalty. This measure is designed to provide a crucial window for users to detect and halt fraudulent transfers. Additionally, the RBI has proposed enhanced authentication protocols for vulnerable groups such as senior citizens and दिव्यांग (persons with disabilities). Under this system, a trusted individual designated by the account holder would serve as an extra layer of verification for high-value transactions, significantly reducing the risk of unauthorized access. Further empowering users, the central bank has suggested the introduction of customizable digital payment controls, including a ‘switch on/off’ feature for various payment modes and the ability to set transaction limits at the account level. This would enable customers to manage and restrict debit activities across multiple channels according to their preferences.
Another critical aspect of the RBI’s proposal targets the misuse of bank accounts as “mule accounts” for laundering proceeds of cybercrime. To address this, the regulator has recommended placing limits on aggregate credits in accounts that lack a well-established or verified business relationship, unless subjected to additional scrutiny. This step aims to disrupt the flow of illicit funds and deter fraudsters from exploiting the banking system. Collectively, these proposed measures reflect the RBI’s proactive stance in adapting regulatory frameworks to evolving digital risks. If implemented effectively, they could significantly enhance trust in India’s digital payments ecosystem while safeguarding millions of users from financial exploitation.
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