NEW DELHI: India is facing a sharp rise in digital fraud, with losses reaching an estimated $2.5 billion in 2025, prompting the Reserve Bank of India (RBI) to consider new measures aimed at protecting consumers in an increasingly digital economy.
The scale of the problem is significant. Nearly 2.5 million people have fallen victim to online scams this year alone — a staggering 4,300% increase compared to 2021. The surge is largely driven by the rapid adoption of digital payments across the country.
A common method used by fraudsters is known as social engineering, where victims are manipulated into sharing sensitive information such as one-time passwords (OTPs). In one such case, a Pune-based analyst was tricked into paying what appeared to be a small traffic fine, only to unknowingly authorise a transaction of over $3,000.
To tackle the growing threat, the RBI has proposed several new safeguards in a recent discussion paper. These include introducing a one-hour delay for certain bank transfers, requiring additional authentication for high-value transactions, and allowing users to set limits or disable digital payments when needed.
The central bank is also considering tighter monitoring of suspicious accounts — often referred to as mule accounts — which are used to move stolen funds.
However, experts warn that while these steps are well-intentioned, they may not be enough to fully address the issue.
Some believe that delaying transactions could help prevent basic scams, but may not stop more advanced fraud schemes. Others point out that implementing such delays would require major changes to India’s payment infrastructure and could slow down the convenience that digital systems currently offer.
“There is no simple way to introduce delays without altering the entire system,” said industry experts, adding that fraudsters may quickly adapt to any new rules.
There are also concerns about practical challenges. For instance, requiring a “trusted person” to approve transactions for elderly users may not always be feasible, especially if that person is unavailable or located abroad.
Beyond regulation, experts stress the importance of digital literacy. Despite widespread use of online payments, awareness about cybersecurity risks remains low among many users.
The RBI has already launched awareness campaigns featuring celebrities like Amitabh Bachchan and leveraged major events like the IPL to spread awareness. However, analysts say much more investment is needed in public education.
Collaboration between banks, law enforcement, and regulatory bodies is also seen as critical to tackling the problem effectively.
While challenges remain, experts agree that the RBI’s proactive approach marks a positive shift towards addressing one of the fastest-growing financial threats in India.
