New Delhi: The Reserve Bank of India (RBI) is planning a significant change in Unified Payments Interface (UPI) transactions, introducing a one-hour cooling period for transfers exceeding ₹10,000 to new beneficiaries.

Under the proposed rule, any payment above ₹10,000 made to a first-time recipient will be temporarily held for one hour before being credited to the receiver’s account. The move is aimed at strengthening safeguards against rising cyber fraud cases linked to digital payments.

Currently, UPI transactions are processed instantly, making them one of the fastest and most widely used digital payment methods in India. However, the RBI’s latest proposal signals a shift toward tighter security measures.

Exemptions and Clarifications

The central bank has clarified that the one-hour delay will apply only to new beneficiaries. Transactions made to previously registered users or trusted merchants will continue to be processed instantly.

Additionally, users will have the option to whitelist beneficiaries, ensuring seamless transactions without delays for trusted recipients.

Concerns from Industry Stakeholders

The proposed rule has raised concerns among banks and fintech companies. Industry experts argue that introducing delays may disrupt the real-time nature of UPI payments, potentially affecting user experience and adoption.

There are also fears that such restrictions could push some users back toward cash transactions, undermining India’s progress in digital payments.

Balancing Security and Convenience

While the RBI’s intent is to curb fraud, financial experts suggest that stronger fraud detection systems and stricter enforcement against cybercriminals may be more effective than delaying transactions.

The proposal has sparked debate over whether the measure will enhance security or inadvertently weaken the efficiency of India’s digital payment ecosystem.