The Reserve Bank of India (RBI) has proposed a series of sweeping changes to digital payments, including transaction delays, additional authentication layers and customer-controlled safeguards, as it looks to curb a sharp rise in frauds driven by social engineering.

In a discussion paper released on Wednesday, the central bank flagged that frauds in digital payments have surged sharply in recent years, even as adoption continues to expand rapidly.

“Digital transaction volumes have increased 38-fold,” the RBI said, but noted that fraud incidents have also jumped significantly, with cases rising from 2.6 lakh in 2021 to 28 lakh in 2025, highlighting growing vulnerabilities in the ecosystem.

The RBI said most frauds are now “authorised push payment” (APP) cases, where users themselves transfer money after being manipulated through impersonation, coercion or social engineering.

Delay in payments above ₹10,000 proposed

Among the key proposals, the central bank has suggested introducing a mandatory delay of up to one hour for digital transactions above ₹10,000, particularly for account-to-account transfers.

The delay would allow users to cancel transactions and provide banks a window to flag suspicious activity. “A short delay… can act as a preventive control by disrupting the fraudster’s psychological influence over the victim,” the RBI said.

Transactions below the threshold would remain unaffected to preserve ease of use.

Extra authentication for vulnerable users

The RBI has also proposed introducing an additional layer of authentication for vulnerable segments such as senior citizens and persons with disabilities.

Under the proposal, transactions above ₹50,000 initiated by such users may require approval from a “trusted person” nominated by the account holder.

The move is aimed at protecting users who are more susceptible to fraud, particularly in cases involving impersonation or emergency-based scams.

Cap on credits to curb mule accounts

To tackle the misuse of bank accounts for routing fraudulent funds, the RBI has proposed placing limits on incoming credits in certain accounts.

Under the framework, accounts could be subject to an annual credit cap of ₹25 lakh unless additional verification is completed. Transactions exceeding the limit may be placed under “shadow credit”, with funds released only after due diligence.

The central bank said the measure is aimed at strengthening monitoring of accounts used as “mules” in fraud networks.

‘Kill switch’ and user controls on digital payments

In a bid to give users greater control, the RBI has proposed introducing a “kill switch”, allowing customers to instantly disable all digital payment access in case of suspected fraud.

Users may also be given the ability to switch payment channels on or off and set transaction limits across digital modes.

The proposals indicate a shift in regulatory thinking, as the RBI looks to introduce friction into a system built on instant payments.

The central bank acknowledged that such measures may “conflict with the core design principle of immediacy of digital payments”, but stressed the need to prioritise safety amid rising fraud risks.