In a discussion paper released on 9 April, the Reserve Bank of India proposed several measures to combat digital fraud. According to reports from Mint, the RBI suggested introducing a one-hour lag at the payer's end for transactions above ₹10,000. Other proposed measures include additional authentication by trusted persons for high-value transactions by vulnerable sections, capping or monitoring total amounts credited into certain accounts, and customer controls such as usage limits and a 'kill switch' to disable all digital payments.
Industry leaders criticized the RBI's approach as addressing symptoms rather than causes. As reported by Mint, Abhinav Parashar, co-founder and CEO of Digio, stated that time delays and trusted persons are downstream safety nets that only trigger after victims have been manipulated. Rohit Mahajan, founder and CEO of Plutos ONE, emphasized that security measures should be proportional, with the least risky transactions remaining frictionless while most risky transactions have strict security levels. The concerns center on friction—any step that slows down users—particularly affecting small merchants in the unorganized sector who depend on real-time payments.
According to Mint reports, UPI transactions are the most vulnerable due to their scale, speed, and irreversibility. The UPI platform processed 219 billion transactions totalling ₹308 trillion in FY26, accounting for 85% of India's digital payments volume. Digital payment fraud accounted for 56.5% of all reported banking fraud cases with losses of ₹520 crore, as reported in the RBI's annual report for FY25. A major concern highlighted by experts is that an estimated 51% of UPI fraud victims never file complaints, according to a June 2025 survey by LocalCircles, suggesting actual fraud volumes are significantly higher than official data indicates.
As reported by Mint, the proposed measures could create significant technical and financial burdens for financial institutions. Kunal Jhunjhunwala, founder of Airpay, noted that the RBI itself has acknowledged potential trade-offs including increased transaction friction and higher compliance costs for banks. Manish Chachada, COO of Cyble, added that banks will be forced to pivot toward more expensive, proactive technology solutions. These measures will increase costs in the short term due to technology investment and operational complexity, with smaller fintechs and cooperative banks facing disproportionate burdens from system upgrades and ongoing monitoring.
According to Mint reports, experts suggested a more sophisticated technological framework including shared intelligence through cross-institutional fraud signal registries, sector coordination using call metadata and SIM-swap alerts, adaptive verification using risk-scoring, and behavioral biometrics. Nishkam Ojha from Deloitte India emphasized the need for a truly effective system that is invisible until necessary, favoring a risk-based approach with advanced technological authentication. Industry leaders called for out-of-band friction such as voice-authenticated OTPs and face liveness checks, along with strengthening customer education to prevent social engineering attacks.
