In times to come, online transactions above ₹10,000 may not be processed immediately; There may be a delay of one hour. This step will give customers an opportunity to stop or cancel erroneous transactions. RBI has made this proposal to stop the increasing digital fraud across the country. RBI believes that fraudsters often put mental pressure on people and get them to transfer money in a hurry; The purpose of this proposed delay is to eliminate such pressure. Most digital transactions today are processed instantly, giving users no time to think or correct mistakes.
3 more special things about RBI’s proposal:
1. ‘Trusted Person’ facility for senior citizens
Security protocols are going to be even more stringent for senior citizens above 70 years of age and disabled people. For transactions above ₹50,000, approval from a ‘Trusted Person’ may be required. This system will act as another layer of security to protect against fraud.
2. Facility to add trusted contacts to ‘Whitelist’
If you’re sending money to a person or merchant you know personally, you’ll have the option to add them to your ‘Whitelist’. The one-hour delay rule will not apply to payments made to whitelisted contacts, ensuring that your daily transactions continue without any hassles.
3. ‘Kill Switch’ to stop digital payments
RBI has also proposed to introduce ‘Kill Switch’. If a customer feels that his account has been hacked or any unauthorized transactions are taking place, he will be able to immediately stop all his digital payment services with just one click.
Why was this necessary?
Last year, the country suffered a financial loss of over ₹22,000 crore due to digital fraud. According to the RBI, while transactions worth more than ₹10,000 account for only 45% of total fraud cases, these transactions account for 98.5% of the total amount lost to fraud. Keeping this important statistic in mind, a transaction limit of ₹ 10,000 has been fixed. When can this rule come into force? RBI is currently discussing the technical aspects of this initiative with banks and the National Payments Corporation of India (NPCI). The main challenge in this is to strike a balance between ‘speed’ and ‘security’ of digital payments. It is expected that detailed guidelines for this measure may be issued in the next few months, after which it will be implemented in a phased manner.
Expert opinion: balancing safety and speed
RBI has recognized that the basic principle of digital payments is ‘Tatkal’—that is, instant—payment. Although a mandatory delay may cause some inconvenience to users, it is considered necessary from a security perspective. RBI has invited suggestions from the general public and stakeholders regarding this discussion paper till May 8.