Reserve Bank of India Suggests New Safety Measures to Prevent Digital Frauds

Syllabus: GS3/Cybersecurity

Context

• In order to curb digital fraud, the Reserve Bank of India has released a discussion paper suggesting additional measures to prevent digital fraud. 

The RBI Measures:

• A time lag of 1 hour for the completion of digital payments of more than 10 thousand rupees.
  • During this period, the payer’s bank would provisionally debit the customer’s account, and the  Customer would retain the option to cancel the transaction for any reason. 
• Additional authentication by a trusted person for senior citizens or for divyang. This trusted individual will act as another layer of authentication for high value transactions.
• Customers can be provided with digital payment controls which would consist of a ‘switch on/off’ facility for any digital payment mode as well as for setting limits for different transaction types at the account level.
  • This would allow customers to control the debit transactions at the account level across any or all digital payment channels.
• To curb Mule Accounts: In order to control the use of bank accounts as “mules” to route money proceeds of Digital Frauds, RBI has suggested capping annual credits at around ₹25 lakh for accounts that have not undergone enhanced due diligence.
  • Funds exceeding the prescribed threshold may be parked as “shadow credits” and released only after the bank is satisfied about their legitimacy
• Kill Switch: The RBI has proposed a ‘kill switch’ that would allow customers to disable all digital payments in their accounts at one stroke.
  • Once the kill-switch is enabled, disabling the feature to re-activate digital payments can be permitted either through digital modes after taking proper authentication measures or through a physical visit to a bank branch by the account holder.

Need for these Measures

• As per National Cyber Crime Reporting Portal Data, around 28 lakh cyber frauds were reported in the year 2025, amounting to 22,931 crore rupees. 
• Increased Digital Transactions: Digital transaction volumes have increased 38-fold, while transaction values have more than tripled.
  • The significant growth of the digital payment ecosystem has been backed by systems such as UPI, IMPS, and NEFT.
• Evolving Nature of Fraud: A typical fraud today may not involve technical compromise of systems, but fraudsters are deploying various tactics, such as bogus call centres, deepfake-driven impersonation scams and mule account networks.
• The instant nature of digital payments further increases the risk, as the scope for timely intervention and recovery of funds becomes limited. 

Initiatives by Government of India to Prevent Cybercrimes

• Indian Computer Emergency Response Team (CERT-In): CERT-In is the national nodal agency for responding to cybersecurity incidents.
  • It provides proactive and reactive cybersecurity support and plays a crucial role in ensuring the security and resilience of the country’s cyber infrastructure.
• National Critical Information Infrastructure Protection Centre (NCIIPC): NCIIPC is responsible for protecting critical information infrastructure from cyber threats.
  • It identifies and designates critical sectors and advises organizations in these sectors on enhancing their cybersecurity measures.
• Cyber Crime Prevention against Women & Children (CCPWC) scheme: The Ministry of Home Affairs has provided financial assistance to all the States & UTs under the scheme to support their efforts for setting up of cyber forensic-cum-training laboratories, training, and hiring of junior cyber consultants. 
• Indian Cyber Crime Coordination Centre (I4C): It provides a framework and ecosystem for Law Enforcement Agencies (LEAs) to deal with cyber crimes in a comprehensive and coordinated manner.
  • ‘Joint Cyber Coordination Teams’ have been constituted for seven regions at Mewat, Jamtara, Ahmedabad, Hyderabad, Chandigarh, Visakhapatnam and Guwahati under the I4C.
• National Cyber Crime Reporting Portal: It is launched to enable the public to report incidents pertaining to all types of cyber crimes.
  • A toll-free number 1930 has been operationalized to get assistance in lodging online cyber complaints. 
  • The Citizen Financial Cyber Fraud Reporting and Management System module has also been launched for immediate reporting of financial frauds and to stop siphoning off funds by the fraudsters.
• Cyber Swachhta Kendra (Botnet Cleaning and Malware Analysis Centre): This initiative is aimed at creating awareness about botnet and malware infections and providing tools for detection and cleaning.
  • It also provides cyber security tips and best practices for citizens and organisations

Source: TH