Proposes 1-Hour Cooling-Off Rule for Digital Payments Above ₹10,000

In a significant move to strengthen consumer protection in India’s rapidly expanding digital payments ecosystem, the Reserve Bank of India (RBI) has proposed a one-hour cooling-off period for digital transactions exceeding ₹10,000. The proposal is part of a discussion paper released on April 9, 2026, titled “Exploring Safeguards in Digital Payments to Curb Frauds.”

The central bank’s recommendation targets a growing category of financial crime known as authorised push payment (APP) fraud, where users are manipulated through social engineering into initiating payments themselves. Under the proposed framework, all account-to-account digital transfers above ₹10,000 would be subject to a one-hour processing delay. This would apply across major payment channels, including UPI, NEFT, RTGS, debit cards, credit cards, and net banking.

The RBI’s data highlights the disproportionate impact of high-value transactions in fraud cases. Payments above ₹10,000 account for 98.5% of the total reported fraud value, despite representing around 45% of total fraud cases by volume. The findings underscore the need for targeted safeguards in higher-value transactions where financial exposure is significantly greater.

The proposal also places special emphasis on protecting vulnerable users. Individuals aged 70 and above account for a striking 92% of reported fraud value. To address this, the RBI has suggested a stricter safeguard for this demographic — a 24-hour cooling-off period for transactions exceeding ₹50,000, along with mandatory secondary approval from a pre-designated trusted individual.

In addition to the cooling-off mechanism, the discussion paper outlines three key preventive measures aimed at strengthening the payments ecosystem:

• Annual Credit Cap: A proposed ₹25 lakh annual credit limit per bank account to curb the misuse of mule accounts. Transactions beyond this threshold would require additional business justification.
• Universal Kill Switch: A system-wide feature allowing users to instantly disable all digital payment channels in case of suspected fraud or compromise.
• Flexible Overrides: Customers may bypass the cooling-off period by either whitelisting trusted beneficiaries or completing enhanced step-up authentication protocols.

The RBI has invited public comments on the proposal, with the consultation window open until May 8, 2026.

If implemented, these measures could mark a major shift in India’s digital payments framework, balancing speed and convenience with stronger safeguards against increasingly sophisticated fraud risks.