Banks propose ‘Yes-No’ prompt for high-risk UPI transfers to curb digital payment frauds

A number of them are proposing a software tweak for the payment app to throw up a prompt, seeking a go-ahead from the payer before the beneficiary’s account is credited in peer-to-peer (P2P) transactions. If a customer says ‘Yes’, the payment is executed within seconds; if she says ‘No’, the transaction is cancelled; and, if she says nothing, the money-transfer goes through and the beneficiary’s account gets credited after an hour.

This is among the suggestions to the Reserve Bank of India (RBI) which had sought banks’ response to a RBI discussion paper that laid down ideas – like lagged credit (instead of instant credit) – to counter a surge in frauds perpetrated through bogus calls, coercion, and deep-fake impersonation.

Many banks are offering this as an alternative to the hour-long uniform delayed credit (of the beneficiary’s account) mooted in the discussion paper. Banks fear a one-hour payment speed-bump may slow down digital acceptance and push up cash transaction.

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Also, banks are not proposing the ‘yes-no-nothing’ prompt for every transaction above the ₹10,000 threshold mentioned in the paper. Rather, they want the prompt to be displayed only for payment commands that indicate anomalous behaviours: like a transaction initiated at 2 in the morning, or to a beneficiary with whom the customer has never dealt with, or to newly-opened recipient bank accounts (often used by money mules).

Some banks have also suggested raising the threshold from ₹10,000 to ₹20,000/25,000-at least, after some time.”Given the rise in frauds, RBI appears serious about the subject and wants to come out with guidelines, at least draft rules, soon. The issue was also raised when deputy governor Jain met bank CEOs recently. Banks have given their suggestions and are working on different solutions. Most frauds are AAPs but everyone appreciates that too much friction may slow down online payments,” said a senior banker.

In AAP or ‘Authorised Push-Payment’ frauds, victims, acting under deception, initiate and authenticate transactions. “While about 2% of transactions may be above Rs 10,000, the absolute number isn’t small with UPI monthly transaction volumes at 23.66 billion,” said another person.

According to banking sources, National Payments Corporation of India (NPCI), the main organisation that runs all retail digital money transfers and payment systems across India, is understood to have expressed its reservations about the proposed lagged credit and payment frictions. “With online payments growing and users getting accustomed to a certain digital payment experience, NPCI feels India should not replicate the systems of other countries. Also, a deferred credit will not help in stopping investment fraud schemes or misuse through mule accounts where accountholders, both payers and beneficiaries, are complicit in financial crimes,” said a banker. NPCI officials were not available for comments.

The proposed precautionary steps are confined to P2P transactions and do not extend to payments to merchants (P2M). “However, many small and micro merchants refrain from opening current accounts with banks, and prefer receiving payments through QR codes linked to their savings accounts. So, in reality these merchant transactions are actually P2P. Some of these, though not too many, may be impacted,” said an industry person.

The number of reported digital frauds jumped from 2.6 lakh in 2021 to 28 lakh in 2025. The value of frauds increased from ₹551 crore to ₹22,931 crore during the same period.