India has seen an alarming surge in digital fraud, with nearly 2.5 million people losing an estimated $25 billion in 2025—a staggering 4,300% increase since 2021. In response, the Reserve Bank of India (RBI) has proposed a series of measures aimed at curbing the epidemic of cyber scams that have plagued the country's rapidly expanding digital payments ecosystem.
Among the key proposals outlined in a recent discussion paper are a one-hour delay in account-to-account transfers and additional authentication for high-value transactions involving vulnerable groups such as the elderly. The RBI also suggests limits on large credits to customer accounts to prevent money laundering through mule accounts, and giving users more control to toggle digital payments and set transaction limits.
These initiatives come after years of rising fraud, driven by the widespread adoption of digital payments. Scammers often use social engineering tactics, such as fake traffic fines or digital arrest threats, to trick victims into sharing sensitive information.
While experts commend the RBI's proactive stance, they caution that the proposed solutions may have limited impact. Rajesh Bansal, former CEO of the RBI's Innovation Hub, notes that while lagged payments could help prevent certain types of fraud, such scams now represent a fraction of the overall problem. "Frauds have moved to another level and are far more sophisticated," he says.
Implementation challenges also loom. Wriju Ray of IDfy points out that introducing a time lag would require significant changes to payment infrastructure and could undermine the core principle of instant digital transactions. "It's like building an expressway and adding speed breakers every few kilometers," Bansal adds.
Other proposals, such as additional checks for senior citizens, raise questions about compliance and accountability. Detecting mule accounts through stricter due diligence may be effective but resource-intensive, with costs likely passed to consumers.
Experts emphasize that regulation alone is not enough. Improving digital literacy is critical, as India's digital adoption has outpaced safeguards. The RBI has already run educational campaigns featuring celebrities and during cricket matches, but more investment is needed.
Bansal calls for closer collaboration between the RBI, police, ministries, and market regulators to tackle the problem holistically. Nevertheless, the consultative approach marks a positive shift from previous top-down directives.
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