• Source:JND
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UPI Payment New Rule: The Reserve Bank of India (RBI) is considering a major step to curb rising digital payment fraud. A recent RBI discussion paper proposes imposing a one-hour delay on digital account-to-account transfers exceeding Rs 10,000. Banks have received mixed reactions to this proposal. While they consider it a security advantage, they are also concerned about the increased IT infrastructure costs and the loss of UPI 's "instant payment" credentials.

Why RBI Proposed Delay Of 1 Hour?

The primary objective of this proposal is to curb the rapidly increasing online fraud. According to data, transactions above Rs 10,000 account for 45 per cent of total fraud cases (by volume) and 98.5 per cent by value. Over the past five years, the amount of digital fraud has increased 41-fold to approximately Rs 23,000 crore. A one-hour delay would provide a window for the sender to cancel suspicious transactions.

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Will This Take Away 'Instant Payment' Feature Of UPI?

Bankers have expressed concern that UPI's primary feature is instant payments. The practice of "lagged credits" contradicts this fundamental principle. However, technical service providers (TSPs) and bankers also believe that deliberately introducing some friction into the system to prevent fraud is the need of the hour, even if it reduces convenience.

Have Banks Asked For Change In Limit?

Banks are seeking changes to this limit to strike a balance between security and convenience. According to a senior executive at a private bank, cited by Jagran Business banks may seek to increase the Rs 10,000 limit to Rs 25,000 or more, as the impact of losses is greater for transactions involving larger amounts. Banks are discussing the issue with the Indian Banks' Association (IBA) and payment SROs and will submit their feedback to the RBI by May 8.

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Will There Be Delay In All Types Of Payments?

No, the RBI has excluded merchant payments (payments made to merchants or shopkeepers) from this rule. This is because merchants are already subject to KYC verification by banks. This rule will primarily apply to personal transfers. Additionally, users will have the option to 'whitelist' accounts of their acquaintances and those with regular transactions, allowing for instant money transfers to those accounts without any delays.


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