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India considers stronger safeguards as online fraud surges, ETCISO
India’s central bank is seeking recommendations to tackle a surge in online fraud as scammers siphon off billions of dollars annually from users of its widely used digital payments network.
The South Asian country’s vast digital payment ecosystem has received global acclaim as a model of low-cost innovation and financial inclusion.
But it has also spawned online crimes, with fraudsters cheating users of nearly $3 billion in 2025 — a nearly 40-fold increase since 2021.
“The potential of digital payments is impeded by complaints related to frauds,” the Reserve Bank of India said in a note published earlier this month that sought suggestions for stronger defences against frauds.
Users can send the bank recommendations until May 9.
Most scams are a result of “manipulation of users through social engineering, coercion, or impersonation” rather than a “technical compromise of systems”, according to the central bank.
Instances of fraudsters posing online as law enforcement officials and blackmailing people to transfer huge amounts of money are notoriously rampant in the world’s most populated country.
“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 being considered by the central bank is “a short delay” before the execution of payments above a certain amount.
“It 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 bank reasoned.
The bank said it was also considering an extra layer of authentication by a “trusted person for high-value digital transactions”.
Over the past decade, digital transaction volumes in India have increased by 38-fold, while transaction values have more than tripled, according to the central bank’s data.
