In a move aimed at strengthening safeguards against rising cases of digital banking fraud, the Reserve Bank of India (RBI) is considering introducing a new rule that could temporarily delay high-value UPI transactions.
Under the proposed mechanism, UPI payments exceeding Ra 10,000 may be subject to a one-hour ‘pause’ before the funds are credited to the recipient’s account. This means that while the amount will be debited from the sender’s account immediately, the final transfer to the beneficiary will take place only after a waiting period of approximately one hour.
The proposed delay is designed to give users a crucial window to review their transactions. In case of suspicion, error, or potential fraud, customers will have the option to cancel the transaction within this timeframe, potentially preventing financial loss caused by accidental or fraudulent transfers.
According to the RBI’s discussion paper, the funds will remain temporarily held by the bank during this period. Banks may also initiate additional verification steps, including reaching out to customers for confirmation before completing the transaction.
The central bank has invited public feedback on the proposal, along with other suggested measures, until May 8. The move reflects RBI’s growing focus on enhancing user protection in the rapidly expanding digital payments ecosystem.
Similar safeguards are already in place in countries such as the United Kingdom, Singapore, and Sweden, where transaction delays have proven effective in reducing fraud incidents.
Importantly, the proposed rule will not impact smaller transactions. Payments below Rs 10,000 will continue to be processed instantly, ensuring that routine digital payments remain fast and convenient while adding an extra layer of security for higher-value transfers.