Why RBI Wants a 1-Hour Delay on UPI Payments Above ₹10,000 – Explained

The Reserve Bank of India has proposed the one hour delay on UPI and bank transfers above the ₹10,000. This proposal comes after as the fraud losses rise to ₹22,930 crore in 2025 and it is largely driven by the social engineering scams. As per the discussion paper of RBI it aims to introduce the safeguards that balance convenience with security and giving users time to pause, verify or cancel suspicious transaction before the money leaves from their accounts.

RBI’s Key Proposal: 1-Hour Delay on High-Value UPI Transfers

The most important recommendation as per the discussion paper is the introduction of the ‘lagged credit mechanism’ for digital payments.

What It Means

The transfers above the ₹10,000 will be held for 1 hour and the customers can cancel the transactions during this period. Also the banks may seek the  reconfirmation if the suspicious activity is detected.

This feature has also certain exemptions and some of are the merchant payments, e-mandates and NACH transactions and also the cheque-based payments.

Now users can also whitelist the trusted beneficiaries and will allow the instant transfers without delay.

Why RBI Is Introducing This Rule

The proposal is aimed at to tackle the Authorized Push Payment (APP) fraud which is the growing threat in India.

Understanding APP Fraud

• In this fraud victims are tricked by sending money themselves.
• The fraudsters use urgency, fear and impersonation tactics to scam the individual.
• Also once money is transferred via UPI/IMPS the recovery of that money is difficult.

RBI also noted that,

• The transactions above the ₹10,000 account for 98.5% of fraud value and these make up around 45% of total fraud cases.

By introducing the delay it will helps break the psychological pressure created by the fraudsters.

Other Key Safety Measures Proposed by RBI

Apart from the delay mechanism central bank has also suggested three additional safeguards.

1. Trusted Person Authentication for the senior citizens whose age is above the 70+ and the persons with disabilities. The transfers above the ₹50,000 would require approval from the nominated trusted individual.
2. RBI also to put the cap on high-value credits in which annual credit limit set to around the ₹25 lakh for individuals/small businesses. The excess funds will be held as the ‘shadow balance’ and it will be released only after verification.
3. Additionally by the Kill Switch Feature customers can instantly disable all the digital payment channels and prevent the further transactions in case of fraud. This feature is already tried and tasted in countries like Singapore and Australia.

Balancing Security and Convenience: RBI’s Challenge

As the discussion paper’s proposal strengthens security RBI has acknowledged some trade offs:

Concerns regarding this are,

• It will may affect the instant nature of UPI payments.
• Could also cause user confusion or delays in the urgent payments.
• Also the fraudsters may manipulate the users into whitelisting accounts.

Question

Q. Which of the following transactions will Most likely be subject to the 1-hour delay?

A. ₹9,999 transfer to a new beneficiary
B. ₹10,001 transfer to a non-whitelisted individual
C. ₹50,000 merchant payment via UPI
D. ₹20,000 NACH debit