The Reserve Bank of India (RBI) has released a discussion paper discussion paper proposing new safeguards to address the sharp rise in digital payment frauds, particularly Authorised Push-Payment (APP) frauds.
While India’s digital transactions have expanded rapidly, fraud cases have surged from 2.6 lakh in 2021 to 28 lakh in 2025, exposing risks in an ecosystem built around instant settlement. The proposed measures aim to introduce targeted friction, such as transaction delays and enhanced authentication, to create a “window of reversal” before funds are irreversibly transferred.
The approach marks a shift from speed-first design toward risk-aware payment architecture, balancing convenience with user protection.
Proposed Safeguards for Public Feedback
Mandatory 1-Hour Lag: For transactions above ₹10,000, a one-hour delay could be introduced to allow payers to cancel suspicious transfers. This would include "whitelisting" options for trusted payees to maintain convenience.
Secondary Verification for Seniors: For citizens aged 70+ and persons with disabilities, transactions over ₹50,000 may require a "trusted person" (designated by the user) to co-authenticate the payment.
Account Credit Caps: To stop the misuse of "mule accounts," the RBI suggests flagging accounts with low turnover and limiting their annual credits to ₹25 lakh unless the owner provides extra documentation.
Enhanced Customer Controls: Banks may be required to provide a "Kill Switch" that instantly disables all digital access, alongside "default-off" modes for new accounts to prevent immediate exploitation by scammers.
Tech-Driven Detection Tools by RBI
Mulehunter.AI: Developed by the RBI Innovation Hub, this tool is already being deployed to identify and shut down networks of mule accounts.
DPIP (Digital Payment Intelligence Platform): A planned platform that will provide real-time risk scores for every transaction, similar to credit scores, to alert banks before money leaves an account.
What is "Authorised Push-Payment (APP) Fraud"?
Authorised Push-Payment (APP) Fraud occurs when a criminal tricks a victim into manually confirming and sending a payment to an account they believe is legitimate.
It acts as a catalyst for Financial Loss because, unlike a stolen card where the bank can easily prove a lack of consent, the victim has technically "authorised" the transaction themselves.
This mechanism manifests as a transition from "technical hacking" to "psychological manipulation," using deepfakes or fake emergency calls to create panic. For the RBI, curbing APP fraud is a primary lever to benchmark a trajectory where digital payments remain trusted despite the rise of sophisticated social engineering.
Policy Relevance
Ensures the Safety of the Rapidly Expanding UPI Ecosystem: By introducing a "time-buffer," the policy addresses the biggest weakness of instant payments—the inability to stop a transaction once the "Send" button is pressed.
Makes Better Use of AI for Proactive Fraud Prevention: The shift toward tools like Mulehunter.AI shows that the RBI is moving from "reactive" policing to "predictive" technology to stop fraud networks at the source.
Shows the Connection Between Demographic Aging and Cyber-Security: The proposal for "Trusted Partner" authentication recognizes that elderly citizens are disproportionately targeted by scammers and require specialized digital guardrails.
Helps Align Bank Accountability with Real-World Risks: By proposing credit limits on low-turnover accounts, the RBI is placing the responsibility on banks to monitor for "mule" activity more strictly.
Follow The Full News Here: RBI Discussion Paper: Safeguards in Digital Payments