The Reserve Bank of India (RBI) is looking to implement a one-hour waiting period for digital payments over ₹10,000 with a focus on P2P transfers through UPI and IMPS.
With this proposed structure, the sending party will see their bank account debited promptly while the receiving party sees their account credited only after a wait of up to one hour. During this “cool down” period, if a user feels they were scammed or otherwise not owed the payment, they could choose to undo their original request.
The concept has been raised in a discussion paper released by the RBI as an informational piece asking for input from the public before it becomes an operational guideline.
Why is the RBI proposing this change?
The change is targeted to address the prevalence of digital payment fraud occurring in India, with data revealing that fraud is skyrocketing both in quantity and value across the nation. A large number of those cases are App frauds, where consumers are duped into paying out money by way of social engineering techniques like phone calls, impersonations, or other urgency based manipulations.
With UPI transactions happening instantaneously, money can go from the senders account to the recipients account within minutes, making it virtually impossible for the RBI to recover those funds. As such, the RBI believes that a waiting period will reduce the ability of scammers to successfully execute an APP scam, while at the same time provide customers with some time to rethink what they did.
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How the “cooling period” will work?
The aim of the one-hour lag is to provide a “golden hour” for safety, where the transaction can be stopped before it has completed. During this hour:
- Users are allowed to evaluate the transaction and cancel if needed.
- Banks may flag potentially fraudulent transactions and re-confirm them with the customer.
- The sender’s funds will be on hold until they have been sent to the intended recipient.
Additionally, the RBI has indicated that users can create a whitelist of ‘trusted beneficiaries’ to prevent delays in proceeding with habitual or safe payments.
This helps keep security requirements balanced with convenience, helping to create a frictionless experience for everyday digital payments.
Transactions that will be impacted are ideal for:
- Person-to-person transfers that are over ₹10,000 (Rs).
- Transactions made to a new recipient or unverified recipient.
However:
- Merchant transactions will be processed as per existing processes irrespective of the one-hour lag.
- Transactions that are less than ₹10,000 will continue to be processed immediately.
This means that everyday digital payments and business-related transactions can continue to be processed without interruption.
Additional safeguards under consideration
In addition to the one-hour delay, the RBI has introduced other initiatives to increase the security of digital payments:
- Additional Authentication Layers for Seniors and at Risk Users
- A “Kill Switch” to temporally turn off digital payments if fraud is suspected
- Possible Transaction Limits on Suspect Accounts
- Increased Monitoring and Alert Systems for Unusual Behavior
Together, these initiatives represent a broadening of the effort to create a more secure digital payments ecosystem.
Worries and Possible Effects
While this proposal adds security, it may also bring up concerns about convienence and efficiency. The success of UPI is predicated upon instant payments; thus, even a minor delay for high-value transactions can have negative effects on:
- Urgent Transfers
- Peer-to-Peer Payments in Urgent Situations
- User Experiences in a Real Time Economy
However, experts believe the impact will be limited if selective enforcement and mitigations such as “whitelisting” are used.
What’s Next?
The RBI has asked the public and stakeholders for feedback on this proposal until late April 2026. If there are sufficient responses, then the Central Bank will make its determination about whether to enact the rule, and how. If the rule is enacted, it could mark a major sea change from the current speed-centric approach to digital payments toward a more security-centric model that could ultimately change how millions of people use UPI.
