Big Change in UPI: RBI May Add 1-Hour Delay on Transfers Above ₹10,000

The Reserve Bank of India may soon introduce a one-hour delay on certain digital payments above ₹10,000. This is a proposal, not a rule yet.

The goal is simple. Stop fraud before money leaves your account. Not all payments will be delayed. Only specific, high-risk transfers may be paused.

India’s digital payments have grown rapidly. But fraud has grown just as fast. This blog explains which payments may be affected, what is changing, and what it means for you.

Which payments will be delayed?

Not every payment will be paused. The proposal targets specific types of transfers.

Person-to-Person (P2P) transfers

These are payments where you send money to another person. Example: Sending ₹20,000 to a friend via UPI.

These transfers are likely to be delayed if:

• Amount is above ₹10,000
• Receiver is new or not trusted
• Transaction looks unusual

Person-to-Merchant (P2M) payments

These are payments made to businesses. Example: Paying at a shop, booking tickets, ordering food online.

These are unlikely to be delayed.

What this means for you

• Your daily payments will mostly stay instant
• Only larger or risky transfers may be paused

Key takeaway: The system is targeting risky behavior, not regular usage.

What exactly is changing?

This is not just about adding a delay. The Reserve Bank of India is proposing a full fraud protection system that works at multiple levels.

1-hour delay for high-value transfers

For payments above ₹10,000, banks may introduce a one-hour holding period before the money is finally transferred. During this time, the amount is temporarily debited but not completed.

This means your money is held safely by the bank for up to one hour before it reaches the receiver. You get time to review the transaction and cancel it if something feels wrong.

Kill switch for your account

The proposal includes a “kill switch” that lets you instantly block all digital payments from your account. This can be useful if you suspect fraud or unauthorized access.

Once activated, no payment can go through until you verify and reactivate your account. This is like as an emergency stop button for your bank account.

Extra checks for large transactions

For transactions above ₹50,000, an additional layer of verification may be required. This is to ensure that high-value transfers are not done under pressure or fraud.

For senior citizens and vulnerable users, a “trusted person” may need to approve such transactions. This adds a second level of confirmation and reduces the risk of large losses.

Crackdown on mule accounts

Mule accounts are bank accounts used to move illegal or fraud money across the system. The RBI wants to restrict how these accounts operate.

Under the proposal, suspicious accounts may face a cap of ₹25 lakh per year on incoming funds. Any amount beyond this may be held as “shadow credit,” meaning the money is received but cannot be used until verified.

If the account holder cannot justify the source within 30 days, the money may be sent back to the original sender.

What this means overall

This is not a single change focused on delay. It is a broader system designed to slow down fraud at every stage. The idea is simple: add small checks at the right places so large financial losses can be avoided.

How will this work in real life?

Let’s take a simple example.

You send ₹25,000 to a new person.

• Amount is debited from your account
• Payment goes into “pending”
• You get 1 hour to review or cancel
• If no action, payment completes

For regular contacts:

• You may be able to whitelist them
• Whitelist means marking someone as trusted

Payments to trusted contacts may not face delays.

Why is RBI doing this?

Digital fraud in India has increased sharply.

Fraud trend data

Source: RBI

Fraud cases increased more than 10 times in 4 years, while the money lost surged over 40 times.

Where most fraud happens

Transactions above ₹10,000 account for around 45% of total fraud cases. But more importantly, they contribute to nearly 98.5% of the total money lost.

For even larger transactions above ₹50,000, the risk becomes sharper. These account for roughly 92% of the total fraud value.

This means fewer transactions are causing most of the financial damage. Fraudsters target bigger amounts because that is where the real money is.

This is exactly why the RBI is focusing on adding checks only for high-value payments, instead of slowing down every transaction.

What will NOT change

The proposal is designed to improve safety without disturbing your daily payment experience. Most routine transactions will continue as usual.

Payments below ₹10,000 will remain instant, just like today. There will be no delay for small-value transfers.

Merchant payments, such as paying at shops or apps, are expected to remain unaffected. Your regular spending flow will not change.

Auto-pay systems like NACH, bill payments, and cheque transactions are also not part of this proposal. These will continue normally.

In practical terms, your everyday expenses like groceries, cabs, and subscriptions will not be impacted.

Pros vs Cons

Benefits

• Stops fraud before completion
• Gives users time to verify
• Improves chances of recovery

Drawbacks

• Slower experience for large payments
• May delay urgent transfers
• Adds slight friction to a fast system

What you should do

This is a preventive step, not a restriction. The aim is to make digital payments safer without affecting daily usage.

If implemented:

• Double-check large payments
• Use trusted contacts feature
• Act quickly if fraud is suspected
• Learn how to use the kill switch

Digital payments will remain fast. They will just become more thoughtful and safer.

Disclaimer

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