RBI suggests cooling-off period for UPI, bank transfers — what it means for you

The Reserve Bank of India (RBI) is proposing a fundamental shift in how digital payments work — introducing a one-hour delay for certain transactions. While this may seem like a step back in an era of instant payments, the central bank’s intent is clear: stop fraud before it becomes irreversible. The central bank has proposed steps including a one-hour cooling-off period for select transactions, a “kill switch” to halt payments, caps on suspicious accounts, and enhanced verification for vulnerable users, amid a continued rise in digital payment fraud.

A one-hour pause

Under the proposal, account-to-account transfers above ₹10,000 may face a one-hour delay. During this period, the amount will be provisionally debited, but users will have the option to cancel the transaction if they suspect fraud.

The delay could be applied at the sender’s end, the receiver’s end, or both—creating a “cooling-off” window in otherwise instant systems like UPI and IMPS.

Why the step

India’s digital payments ecosystem has expanded rapidly, with volumes rising 38-fold over the past decade. However, fraud cases have surged alongside, from 2.6 lakh incidents in 2021 to 28 lakh cases involving ₹22,931 crore in 2025.

Most of these frauds now rely on social engineering tactics such as impersonation, coercion, and fake emergencies, where users are tricked into authorising payments themselves.

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Why speed is now a vulnerability

The RBI notes that fraudsters often create urgency and psychological pressure to push victims into making instant transfers. Transactions above ₹10,000 account for nearly 98.5% of fraud value, making them a key focus area.

A delay, therefore, serves as a risk-control tool—giving users time to reassess and banks an opportunity to detect suspicious activity.

Aashish Jha, Internal Audit officer in a PSU bank, said: “RBI's recommendations represent a key advancement in the design of digital transactions by building security into the transaction rather than afterwards. The recommended delay of one hour for transactions over ₹10,000 is a tactical approach using time as a risk mitigation tool. With much fraud today being driven by social engineering and scams that promote urgency, the recommended delay could provide users with an opportunity to evaluate their purchases and report any suspicious transactions prior to irretrievably losing their money.”

Additional safeguards

The RBI has also proposed an added layer of protection for high-value transactions. For payments above ₹50,000, vulnerable users such as senior citizens and persons with disabilities may need approval from a “trusted person” before the transaction is completed.

Siddharth Maurya, Managing Director at Vibhavangal Anukulkara, said: “RBI's suggestion to impose an hour-long delay on transactions that exceed ₹10,000 is highly relevant in combating this growing menace of digital payment frauds. The quickness of fund transfers is essential for perpetrators of such crimes since they use this tactic to divert funds into untraceable accounts.”

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He added that the trusted person mechanism “will have far-reaching consequences for elderly customers and those who lack technical proficiency… even if the additional step adds some friction, the payoff would be increased trust.”

The central bank has also proposed a “kill switch” that allows users to instantly disable all digital payments in case of suspected fraud, along with broader controls such as setting transaction limits and toggling payment modes.

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Balancing convenience

Experts believe the proposal reflects a shift toward embedding security within transaction design. Raj P Narayanam, Founder & Executive Chairman of Zaggle, said: “A one-hour delay for higher-value or first-time transactions can act as an effective cooling-off period, giving users time to review and prevent potential fraud… If executed well, such measures can strike the right balance between security and convenience.”

However, some caution against blanket measures. Eshita Singh, Head of Payments Propositions at IDfy, noted: “The popularity and acceptance of UPI lies in its instant nature… a blanket delay on all payments disrupts that convenience. The need of the hour is a triangulated risk scoring of transactions rather than a blanket pausing.”

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What it means for users

If implemented, the proposal could introduce slight delays in certain transactions — but also significantly reduce fraud risks. In an ecosystem where scams increasingly exploit human behaviour rather than system flaws, a one-hour pause could offer critical protection. The RBI has invited stakeholder comments on the proposal until May 8, after which final guidelines are expected.