RBI Proposes Radical Shift in Digital Banking to Combat 22,931 Crore Rupee Cyber Fraud Crisis

Central to the proposed reforms is the introduction of a mandatory one-hour time lag for the completion of any digital payment exceeding 10 thousand rupees. Under this protocol, the payer’s bank would provisionally debit the customer’s account, yet the customer would retain the absolute option to cancel the transaction for any reason during this cooling-off period. In a bid to protect the most vulnerable segments of society, the RBI has further suggested a system of additional authentication by a trusted person for senior citizens or for divyang. This designated trusted individual will act as a secondary layer of authentication for all high-value transactions, ensuring that vulnerable accounts are not exploited through coercion or deceit.

Furthermore, the central bank aims to empower consumers through enhanced digital payment controls, including a robust ‘switch on/off’ facility for any digital payment mode. This measure would allow customers to set specific limits for different transaction types at the account level, effectively permitting users to control debit transactions across any or all digital payment channels at their own discretion. To specifically target the use of bank accounts as “mules” for routing the proceeds of digital frauds, the RBI has proposed a regulatory measure to limit aggregate credits in an account unless an additional review of a satisfactory business relationship is conducted. The RBI has officially invited comments and feedback through the Connect 2 Regulate link on the RBI Website, with the window for public and stakeholder input remaining open until 8th May. These proposed shifts signal a transformative era in Indian banking, where transaction speed is balanced against the urgent necessity of digital sovereign security.a