Why RBI Wants A 1-Hour Delay On Digital Transactions Above ₹10,000

India’s digital payments revolution has made sending money almost effortless. A few taps on a phone, and funds move instantly through platforms like Unified Payments Interface, IMPS, and net banking. But the same speed that makes digital payments convenient has also made them vulnerable to fraud.

That is why the Reserve Bank of India (RBI) is now considering a new rule of a mandatory one-hour delay for certain digital transfers above ₹10,000.

The proposal, unveiled in an RBI discussion paper this week, aims to curb the rapid rise in online scams and financial fraud.

What Exactly Is RBI Proposing?

Under the proposal, account-to-account digital transfers above ₹10,000 may not go through instantly. Instead, banks would place the payment in a one-hour “cooling-off” period before the money reaches the recipient.

During that hour:

• The amount may be provisionally debited from the sender’s account.
• Customers would still be able to cancel the transaction.
• Banks could flag suspicious activity and ask the customer to reconfirm the payment.

The rule would mainly apply to first-time or unfamiliar payees in person-to-person transfers through UPI, IMPS, or similar systems. Merchant payments, recurring subscriptions, salary credits, cheque payments, and trusted payees may remain exempt.

Why Is RBI Thinking About This?

The short answer is that fraud is exploding.

According to the RBI discussion paper, reported digital payment fraud in India jumped from about 2.6 lakh cases worth ₹551 crore in 2021 to nearly 28 lakh cases involving losses of more than ₹22,900 crore in 2025.

What is more alarming is that transactions above ₹10,000 account for only around 45% of fraud cases by number, but nearly 98.5% of the total value lost. That makes larger transactions the biggest target for scammers.

The RBI believes that most of these frauds are not caused by hackers breaking into bank systems. Instead, they involve Authorized Push Payment fraud, where victims are tricked into sending money themselves.

Scammers often pose as:

• Bank officials
• Police officers
• Customer care executives
• Delivery agents
• Relatives using AI-generated voices or deepfakes

Victims are pressured into transferring money immediately, often within minutes.

In its paper, the RBI said fraudsters depend on urgency and psychological pressure. A one-hour delay could break that pressure and give people time to think, verify, or talk to someone before the money disappears. As the RBI paper noted, the delay can break the fraudster’s psychological control.

A Shift in Thinking: Speed Is No Longer Everything

For years, instant payments were seen as the gold standard. India became one of the world’s leaders in real-time digital payments thanks to UPI.

But now regulators are beginning to ask a difficult question: Is instant always better?

The RBI’s latest thinking suggests that a little friction may actually make digital payments safer. Even the central bank acknowledged that what was once considered a flaw, a delay in payment, may now become a protective feature.

This is a major change in how digital banking is viewed. Instead of prioritizing only speed, the RBI is trying to balance speed with safety.

Who Will Be Affected?

If implemented, the rule is likely to affect:

• First-time transfers above ₹10,000
• Payments to new bank accounts or UPI IDs
• High-value transfers between individuals

However, people may be able to whitelist trusted recipients such as family members, landlords, regular vendors, or business contacts. Once a payee is whitelisted, future transactions to that person can occur instantly, without the 1-hour delay.

The RBI is also considering extra protections for senior citizens and differently abled users. For people aged 70 or older, the central bank may require approval from a trusted person before completing large transactions of ₹50,000 or more.

Not Everyone Is Convinced

While the proposal may reduce fraud, it could also create inconvenience.

Imagine having to wait an hour to send urgent money for:

• A medical emergency
• A last-minute travel booking
• A property advance
• A business payment

Critics say the rule may slow down genuine transactions and go against the very idea of instant digital payments.

The RBI itself admitted that the proposal conflicts with the immediacy principle of modern digital payment systems. It also warned that fraudsters may simply pressure victims into whitelisting them in advance, reducing the effectiveness of the safeguard.

Banks and payment companies may also face the challenge of redesigning their systems to support delayed processing, cancellation windows, and fraud alerts.

What Happens Next?

At the moment, the proposal is not yet a law. The RBI has invited comments from banks, payment companies, industry experts, and the public until May 8, 2026. After reviewing the feedback, the central bank may release draft guidelines.

If approved, the move could mark one of the biggest changes to India’s digital payment system since the rise of UPI.

For millions of Indians, it may mean learning a new habit: waiting an extra hour before sending large sums of money. But if that hour can prevent even a fraction of the ₹22,000-crore fraud problem, the RBI believes it could be worth it.