April 10, 2026
2 mins read
The RBI’s April 2026 discussion paper addresses the rising threat of digital payment fraud in India. It proposes measures such as a short delay for certain high-value digital transfers, a “trusted person” facility for senior citizens and persons with disabilities, annual transaction limits for digital channels, and a customer-activated “kill switch” to quickly disable digital payments in case of suspected fraud. The aim is to strengthen safety while preserving the convenience of digital transactions across channels such as UPI and mobile banking.
Digital payments in India have grown very fast in recent years. Platforms like UPI, mobile banking, and card payments are now widely used across India. Even tier 3 and 4 regions have joined the trend. This has made transactions easier and improved financial access.
The growth has been sharp. Transaction volumes have increased by nearly 38 times and the total value of transactions has more than tripled. The compound annual growth rate (CAGR) stands at about 53% in volume and 13% in value.
However, this growth has also brought risks. Both the number and value of frauds have gone up sharply.
Year | Number of Frauds Reported | YoY Growth (Cases) | Value of Frauds (₹ crore) | YoY Growth in % |
2021 | 2.6 lakh | - | 551 | - |
2022 | 6.9 lakh | 165% | 2,290 | 315% |
2023 | 13.1 lakh | 90% | 7,465 | 226% |
2024 | 24 lakh | 83% | 22,848 | 206% |
2025 | 28 lakh | 17% | 22,931 | 0.4% |
Most cases fall under authorised push payment (APP) fraud. Fraudsters are deploying various tactics, such as bogus call centres, deepfake-driven impersonation scams and mule account networks. Senior citizens and other vulnerable groups are at higher risk.
Over the years, the Reserve Bank has introduced several measures to strengthen the safety and resilience of digital payments.
Two-factor authentication was made mandatory for digital payments. Tokenisation was introduced to protect card data. Customers were also given more control over their cards. Since 2020, users can switch cards on or off and set limits.
Further, the RBI issued guidelines for banks in 2021 and for non-bank payment system operators in 2024. In 2025, a principle-based framework for authentication was also introduced.
To further strengthen and safeguard against these frauds, the RBI released a consultation paper on digital payment fraud in April 2026. The aim of this is to improve safety and protect customers.
The RBI discussion paper suggests four key measures:
A delay may be introduced for some payments. This will apply to authorised push payments above ₹10,000. A gap of one hour can be added before the money is credited. This gives users time to review the transaction. This feels important because as per information available with the National Cyber Crime Reporting Portal (NCRP), transactions above ₹10,000 account for approximately 45% of reported fraud cases by volume, but about 98.5% by value.
Introducing a lag at the payer’s end is important, as this is the stage at which the decision to transfer funds is made and where social-engineering tactics are deployed. A short delay before execution of the debit can act as a preventive control by disrupting the fraudster’s psychological influence over the victim and by giving the payer an opportunity to reconsider the transaction.
However, all merchant transactions (done through any mode, for example, UPI, cards, net banking etc.,). Recurring payments (such as e-mandates, NACH-based payments) and payments through cheques are proposed to be exempted. Payer can also whitelist a particular transaction if the same is time sensitive and/or a particular payee.
Certain groups are more exposed to fraud. This mainly includes individuals aged 70 years and above, and persons with disabilities. These users are often targeted through social engineering. Fraudsters may pretend to be family members or create fake emergency situations. Because of this, an additional layer of protection is proposed. Such customers can nominate a “trusted person”. This person will act as a second level of approval for high-value transactions.
For payments above ₹50,000, confirmation from a trusted person may be required before the transaction is completed. This threshold is important as around 92% of the total fraud value falls above ₹50,000.
Thus, the threshold balances operational efficiency for smaller transactions with robust protection for larger-value transfers. Any change of a trusted person may be permitted only after a mandatory 24-hour cooling period, thereby ensuring that such decisions are deliberate and informed.
Under the third option, banks may limit how much money an account can receive in a year. It is proposed to bring in a regulatory measure of limiting aggregate credits in an account without an additional review of a satisfactory business relationship.
The proposed threshold is ₹25 lakh. If the limit is crossed, the funds may be held temporarily by the bank. During this period, the bank may seek additional details or documents from the customer to understand the nature of the transaction.
If the bank is satisfied with the explanation, the funds may be released for use. However, if the response is not adequate or no clarification is provided, the amount may be reversed after 30 days and returned to the source account.
This measure is intended to curb the misuse of accounts, especially those used as mule accounts for routing fraudulent funds.
Under this option, customers may get more control over their accounts. This is similar to how debit and credit cards work today. Users can switch cards on or off and set limits for different types of transactions. A similar approach is now being considered for digital payments. Customers can be given the option to manage digital payment modes directly. They may be able to switch payments on or off, set transaction limits, and control usage across different channels. This control will apply at the account level, covering all digital payment methods linked to the account.
These features can be accessed through multiple channels. This includes bank branches, internet banking, mobile banking, phone banking, and other authenticated interfaces.
Customers may also be provided with a “kill switch”. This will allow them to disable all digital payment transactions instantly in case of suspected fraud.
Digital payments have made life easier. But they have also increased exposure to fraud.
Steps taken by the RBI and other authorities can help reduce fraud. Strong systems and controls can limit such incidents to a large extent. However, it is not possible to eliminate all risks. Fraudsters keep finding new methods and loopholes.
As an individual, being vigilant is always important. We must be careful while sharing sensitive details. OTPs, passwords, and account information should never be shared with unknown or untrusted individuals or agencies. Awareness and caution remain the first line of defence.
SEBI Registered Research Analyst (INH000006396).
Founded in 1986, Dalal Street Investment Journal (DSIJ) brings decades of experience in India’s equity markets. DSIJ's research combines fundamental analysis with price action, guided by disciplined risk management and capital preservation. They follow a structured, data-driven approach designed to help investors and traders make informed decisions beyond short-term market noise.
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