The Indian government plans to impose a new law shortly to get along with the growing number of scams involving the digital payment channel UPI.
What Is The New UPI Rule?
The government intends to impose a minimum time for a transaction over a certain amount that occurs for the first time between two persons. According to sources, the proposal likely involves a four-hour timeframe for the initial transaction between two users for digital payments to be completed for all transactions likely exceeding Rs 2,000.
The UPI user will have four hours within that timeframe to reverse or alter payments sent to someone for the first time.
Why Is The Rule Being Implemented?
While the procedure is expected to cause some inconvenience in digital payments, officials believe it is vital to address cybersecurity concerns. If approved, the bill might apply to a wide spectrum of digital payments, including Immediate Payment Service (IMPS), Real-Time Gross Settlement (RTGS), and potentially the Unified Payments Interface (UPI).
Keep in mind that the plan is to regulate every first transaction between two users, regardless of their independent past transaction histories, rather than simply delaying or limiting the first transaction upon account creation, which happens in some shape or form across most digital payment means.
How Many Frauds Are Taking Place?
According to the RBI Annual Report 2022-23, banks saw the highest number of frauds in the digital payment category during the fiscal year 2022-23. The overall number of fraud cases in the banking sector in FY2023, totalling Rs 30,252 crore, was estimated at 13,530.