RBI seeks tougher anti-fraud measures as digital payment scams rise in India

India’s central bank is considering stronger safeguards to tackle a sharp rise in online fraud linked to the country’s fast-growing digital payments network.

The Reserve Bank of India has invited recommendations on measures to curb digital payment frauds, after scammers siphoned off nearly $3 billion from users in 2025. The losses mark a nearly 40-fold increase since 2021.

India’s digital payments ecosystem has received international recognition for expanding low-cost financial services and increasing financial inclusion. However, the rapid growth of digital transactions has also led to a rise in online scams.

In a note published earlier this month, the central bank said: “The potential of digital payments is impeded by complaints related to frauds.”

The RBI has asked users and stakeholders to submit recommendations by May 9 on ways to strengthen protections against fraud.

According to the central bank, most cases are linked to “manipulation of users through social engineering, coercion, or impersonation” rather than any “technical compromise of systems”.

Cases involving fraudsters impersonating law enforcement officials and pressuring victims into transferring large sums of money have become widespread across India.

“Almost all sections of society especially the vulnerable groups such as senior citizens have fallen prey to” online fraud, the note said.

“Therefore, there is an urgent need to put in place systems and processes to address these issues.”

Among the measures under consideration is “a short delay” before payments above a certain amount are processed.

The RBI said such a delay “can act as a preventive control by disrupting the fraudster’s psychological influence over the victim and by giving the payer an opportunity to reconsider the transaction”.

The central bank is also considering introducing an additional layer of verification involving a “trusted person for high-value digital transactions”.

Data from the RBI shows that digital transaction volumes in India have increased 38-fold over the past decade, while transaction values have more than tripled.