RBI suggests cooling-off period for UPI, bank transfers — what it means for you

The Reserve Bank of India (RBI) is contemplating a significant transformation in the realm of digital payments, suggesting a one-hour delay for specific transactions. While this might appear to be a regression in our fast-paced payment landscape, the central bank's primary objective is clear: to curb fraudulent activities before they escalate. Among the proposed measures are a one-hour cooling-off period for transactions exceeding ₹10,000, a 'kill switch' to halt payments, limits on suspicious accounts, and increased verification for at-risk users. This initiative comes against the backdrop of a troubling rise in digital payment fraud. Under the new guidelines, transfers above ₹10,000 would be subject to an hour’s delay. During this interval, the amount would be temporarily withdrawn, allowing users to cancel if they suspect fraudulent activity. This delay could be initiated from either the sender's or receiver's end, effectively creating a safety net in the otherwise immediate systems like UPI and IMPS. India's digital payments landscape has seen explosive growth, skyrocketing 38 times in the last decade. Unfortunately, this has coincided with a rapid increase in fraud, with incidents jumping from 260,000 in 2021 to an alarming 2.8 million cases worth ₹22,931 crore in 2025. Many of these scams involve social engineering tactics such as impersonation and coercion, where victims are tricked into authorizing payments. The RBI indicates that fraudsters thrive on instilling a sense of urgency, compelling victims to make hasty transfers. With transactions over ₹10,000 representing nearly 98.5% of fraud value, the proposed delay serves as a critical risk mitigation strategy, allowing users to reconsider and providing banks with the chance to identify suspicious activities. Experts highlight that these recommendations mark a pivotal shift in the design of digital transactions, embedding security measures within the transaction process rather than applying them post-factum. Aashish Jha, an Internal Audit officer at a public sector bank, emphasized that this delay could give users a chance to evaluate their transactions more thoroughly. Additionally, the RBI aims to implement enhanced protections for high-value transactions. Users, particularly vulnerable groups like senior citizens and those with disabilities, may need consent from a 'trusted person' for payments exceeding ₹50,000. Siddharth Maurya, Managing Director at Vibhavangal Anukulkara, expressed that this one-hour delay could be crucial in mitigating the rising threat of digital payment fraud. The swift nature of fund transfers often aids criminals in diverting money into untraceable accounts. Furthermore, the proposal includes a 'kill switch' feature, enabling users to instantly disable all digital payment methods if fraud is suspected. Other suggested controls would allow users to set transaction limits and manage payment modes. While many experts believe this proposal emphasizes the need for security in transaction design, some caution against sweeping measures. Eshita Singh, Head of Payments Propositions at IDfy, noted that the allure of UPI lies in its instant nature, and a universal delay could disrupt that convenience. Instead, she advocates for a more nuanced approach, such as a risk-scoring system for transactions. If adopted, these guidelines could lead to minor delays in certain transactions while significantly lowering fraud risks. In a digital landscape where scams increasingly capitalize on human behavior rather than technological vulnerabilities, a one-hour pause might be a crucial safeguard. The RBI has opened the floor for stakeholder feedback on this proposal until May 8, with final guidelines expected to follow shortly thereafter.