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- From 'kill switch' to 'lagged credit', RBI proposes these changes to mitigate financial frauds
From 'kill switch' to 'lagged credit', RBI proposes these changes to mitigate financial frauds
To prevent fraud, the RBI has recommended lagged credit. Under this, if you make a payment of more than Rs 10,000, it will not be immediately transferred to the other person's account.
Digitalisation has made payments easy, as they can be made with just a few clicks. However, this has given fraudsters an opportunity to do online financial fraud, which is spreading just as rapidly. To protect your hard-earned money, the Reserve Bank of India (RBI) has proposed some steps . These new rules aim to curb online fraud and give customers better control over their money. The RBI has also sought public suggestions on this matter by May 8, 2026.
RBI proposes 'kill switch'
One of the RBI's biggest proposals is a kill switch. This would be a magical button on your mobile phone that, when pressed, would instantly disable all digital payment modes (like UPI, net banking, cards) linked to your account. If you ever suspect your phone has been hacked or you're a victim of fraud, you'll be able to freeze all your digital services in a flash. Once the kill switch is activated, reactivating it requires going through a rigorous security process or visiting a bank branch.
Time gap for payments above Rs 10,000
To prevent fraud, the RBI has recommended lagged credit. Under this, if you make a payment of more than Rs 10,000, it will not be immediately transferred to the other person's account. There may be a one-hour hold period after the transaction is initiated. During this one hour, the money will be deducted from your account, but you will have the option to cancel the payment before it reaches the other party. Statistics show that transactions over Rs 10,000 account for approximately 98.5 per cent of the total fraud value.
Extra protection for the elderly, differently abled persons
The RBI has introduced the concept of a Trusted Person for senior citizens aged 70 and over and for those with different abilities. For large transactions, these customers can choose a trusted person to authenticate or verify the transaction. This will curb fraudsters who target the elderly.
Why were these rules necessary?
According to the National Cyber Crime Reporting Portal (NCRP), digital fraud cases in India are on the rise. In 2025, nearly 2.8 million fraud cases were reported, resulting in a loss of Rs 22,931 crore. To prevent fraud through mule accounts (accounts opened in the name of others), the RBI is now considering setting limits on the total credit allowed into accounts.
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