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In an effort to reduce the increasing number of online payment fraud cases, the government intends to impose a minimum time for transactions over a certain amount between two individuals for the first time, a report in The Indian Express has said. The report quoted officials who said the plan probably includes a four-hour window for digital payments to be processed for all transactions exceeding Rs 2,000 for the first transaction between two users.
Officials quoted said they believe that the procedure is required to address cybersecurity issues even though it can lead to some hiccups in the payments. If implemented, the measures would cover digital payments via Unified Payments Interface (UPI), Real Time Gross Settlement (RTGS), and Immediate Payment Service (IMPS).
The plan is to regulate every initial transaction between two users, regardless of their separate past transaction history.
For example, at the moment, users can send up to Rs 5,000 within the first 24 hours of opening a new UPI account. Likewise, within the first 24 hours of a beneficiary's activation, up to Rs 50,000 can be transferred in full or in portions via National Electronic Funds Transfer (NEFT).
In a related development, the Union Finance Ministry's Department of Financial Services held a meeting to check digital frauds and the government said it has suspended 70 lakh mobile numbers on account of suspicious transactions, Financial Services Secretary Vivek Joshi said on Tuesday.
A senior government official requesting anonymity told the publication, “We are looking to add a time limit of four hours for first-time digital transactions over Rs 2,000. The discussion will be taken up during a meeting on Tuesday with government and industry stakeholders including the Reserve Bank of India, various public and private sector banks, and tech companies like Google and Razorpay.”
As per the RBI Annual Report 2022-23, banks experienced the highest number of fraudulent transactions in the digital payment category in the fiscal year 2022–2023.
According to data from FY2023, there were 13,530 fraud cases in the banking system totaling Rs 30,252 crore.
Of these, 6,659 cases, or nearly 49 per cent, fell into the category of digital payments using cards or the internet.
Earlier this month, UCO Bank had to disable its IMPS system temporarily after it reported credit of Rs 820 crore to its users via the payment mode. The bank took steps to recover Rs 649 crore but the case acted as a catalyst for the discussion on the digital payments' security.
During November 10-13, the bank observed, due to technical issues in IMPS, certain transaction(s) initiated by holders of other banks have resulted in credit to the account holders in UCO Bank without actual receipt of money from these banks.
The bank said in a statement last week that certain transactions initiated by customers of other banks had resulted in credit to the account holders of UCO Bank without any actual money being received from these banks because of technical issues in IMPS during November 10–13. The case has now been referred to the Central Bureau of Investigation (CBI).