Government Considers UPI Alert System to Combat Fraud
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As incidents of banking fraud rise in the digital banking era, the government is exploring measures to control and prevent them. Particularly concerning fraud through UPI (Unified Payments Interface), several proposals are under consideration, and an alert system may be introduced to address this issue.
Proposed UPI Alert System: According to sources from the Finance Ministry, financial institutions may adopt a rapid alert system for digital payments exceeding a specified limit, potentially set at Rs 5,000. This system would be particularly applicable to new users or vendors.
Verification Process:
- When a user initiates a UPI payment of more than Rs 5,000 to another user or vendor for the first time, a verification message or call will be sent before the money is debited.
- The payment will only proceed after the user's verification, automatically halting payments in cases of suspicion.
Precedence of Alert Systems:
- While this proposal is not entirely novel, as many financial institutions have already implemented similar alert systems for high-value transactions, it signifies a potential standardization across the industry.
Potential Time Limit for UPI Payments:
- There were previous reports suggesting the imposition of a time limit for UPI payments, requiring a waiting period of at least 4 hours after adding a new user or vendor. However, no final approval has been provided for either the time limit or the rapid alert system.
Stringent Measures Against Fraud:
- The government has taken a stringent stance against digital banking fraud, blocking lakhs of mobile numbers linked to suspicious transactions.
- Financial Services Secretary Vivek Joshi announced the suspension of 70 lakh mobile numbers due to their involvement in dubious activities.
- Additionally, the government has tightened rules for SIM cards from December 1, reflecting a multifaceted approach to curb digital banking fraud effectively."
These initiatives aim to enhance security and instill confidence in digital banking transactions.