RBI: Big news for everyone! As digital payments have become more convenient, online fraud cases have also surged significantly. To safeguard your hard-earned money from scammers, the Reserve Bank of India (RBI) has proposed some groundbreaking changes. These new regulations are designed to empower customers with greater control over their finances and reduce the potential for fraud.
The RBI is inviting public feedback on these proposals until May 8, 2026. Let’s explore how these changes will transform your banking experience:
Kill Switch: One button, and everything is under control!
One of the RBI’s most impactful proposals is the “kill switch.” Think of it as a magical button on your mobile banking app or online banking platform.
How does it function?
If you suspect that your phone has been compromised or if you fall victim to fraud, you can instantly disable all digital payment methods (like UPI, net banking, and cards) linked to your account by simply pressing this button. Once the kill switch is activated, you will need to undergo stringent security checks or visit a bank branch to reactivate your services.
Lagged Credit for Payments Exceeding ₹10,000:
Fraudsters often target large transactions. To combat this, the RBI has suggested implementing “Lagged Credit.” If you initiate a payment over ₹10,000, the funds will not be immediately transferred to the recipient’s account.
1-Hour Hold: There may be a one-hour hold period after the transaction is initiated. During this interval, the money will be deducted from your account, but you will have the option to cancel it before it reaches the other party. Statistics indicate that around 98.5% of total fraud value is linked to transactions above Rs 10,000.
Senior citizens aged 70 and above, as well as individuals with disabilities, are frequently targeted by fraudsters. To protect them, the RBI has introduced the idea of a “Trusted Person.”
For larger transactions, these customers can designate a trusted individual to authenticate or verify the transaction. This measure will help limit the opportunities for fraudsters.
Why are these rules needed?
The National Cyber Crime Reporting Portal (NCRP) statistics are alarming:
Year 2025: Nearly 2.8 million fraud cases were reported in a single year.
Total loss: Citizens lost a staggering Rs 22,931 crore.
Curbing Mule Accounts: To prevent fraud through fake accounts opened in other people’s names, the RBI is now considering setting a total credit limit for accounts.