RBI proposes safeguards for digital transactions — what it means for senior citizens and other users

The Reserve Bank of India (RBI) has proposed a set of changes aimed at curbing the sharp rise in online frauds. While these safeguards may slightly slow down digital payments, they are intended to make transactions safer.

In a discussion paper released on Thursday, the central bank has suggested measures such as a one-hour delay for certain transactions, mandatory additional authentication for vulnerable users, caps on credits into bank accounts, and a “kill switch” to block payments.

"Over the past decade, digital payments in India have expanded at an unprecedented pace. Digital transaction volumes have increased 38-fold, while transaction values have more than tripled," RBI noted in the discussion paper, highlighting the rapid growth of the ecosystem, and hence the rising need for stronger safeguards against online fraud.

Why RBI is taking this step?

The significant growth of the digital payment ecosystem has been backed by systems such as UPI, IMPS, and NEFT, along with safeguards such as two-factor authentication and transaction alerts, RBI noted.

According to the central bank, a typical fraud today may not involve technical compromise of systems, but instead relies on social engineering, coercion or impersonation, where users themselves end up authorising transactions.

The instant nature of digital payments further increases the risk, as the “the scope for timely intervention and recovery of funds becomes limited,” it noted. Data from the National Cyber Crime Reporting Portal shows that the number of such frauds has risen sharply in recent years.

Here's how many cases were reported in the last five years, as cited by RBI:

• 28 lakh fraud cases worth ₹22,931 crore in 2025
• 24 lakh cases worth ₹22,848 crore in 2024
• 13.1 lakh cases worth ₹7,465 crore in 2023
• 6.9 lakh cases worth ₹2,290 crore in 2022
• 2.6 lakh cases worth ₹551 crore in 2021

“Fraudsters are deploying various tactics, such as bogus call centres, deepfake-driven impersonation scams and mule account networks. Almost all sections of society especially the vulnerable groups such as senior citizens have fallen prey to such APP (Authorised Push Payment) frauds,” RBI said in the paper.

What measures were proposed for senior citizens?

A key proposal involves introducing an additional layer of authentication for high-value transactions, particularly for vulnerable groups such as senior citizens and persons with disabilities, by requiring approval from a “trusted individual.”

For transactions exceeding ₹50,000, these users may need authorisation from the trusted person before funds can be transferred. “The enhanced safeguard mechanism can be in the form of a “trusted person” designated by a vulnerable customer. Any change of trusted person may be permitted only after a mandatory 24-hour cooling period, thereby ensuring that such decisions are deliberate and informed,” RBI said in the paper.

The move aims to reduce losses arising from impersonation and coercion-based frauds, which tend to disproportionately affect such groups, as witnessed in several cases reported over the last few years.

What may change for individuals?

The RBI has also proposed the imposition of stricter controls on bank accounts in a bid to curb the misuse of mule accounts. It has suggested capping annual credits at around ₹25 lakh for accounts that have not undergone enhanced due diligence, with any inflows beyond this limit subject to additional verification.

Funds exceeding the prescribed threshold may be parked as “shadow credits” and released only after the bank is satisfied about their legitimacy, based on additional information or documents submitted by the beneficiary.

If concerns persist within a period of say, 30 calendar days from the date of such shadow credit, such amounts could be reversed and sent back to the source. the central bank noted.

Apart from these measures, the RBI has also proposed expanding customer-driven security controls across all digital payment channels, including UPI, cards, and net banking. These would allow users to enable or disable payment modes, set transaction limits, and activate a “kill switch” to instantly block all digital transactions in case of suspected scam.

What is the “kill switch” feature?

The RBI has proposed a ‘kill switch’ that would allow customers to disable all digital payments in their accounts at one stroke.

Once the kill-switch is enabled, disabling the feature to re-activate digital payments can be permitted either through digital modes after taking proper authentication measures or through a physical visit to a bank branch by the account holder.

The RBI has invited stakeholders to submit their comments on the proposal until May 8, 2026. After that is done, the apex bank will consider issuing draft guidelines for implementation.