Author
LoansJagat Team
Read Time
4 Min
19 Jun 2025
Think about how fast you send money today – one swipe, tap, and UPI. But behind this comfort is a strong network that guards your cash like a soldier on duty, day and night. That security comes from the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI).
In April 2025 alone, UPI processed over 33.10 billion transactions, worth nearly ₹45,44,00,00,00,000. Now the big question is: How do RBI and NPCI ensure your trust isn’t broken?
Let’s break it down, like a financial expert would. Step-by-step, clear, and focused.
RBI is not just a policy-maker. It’s the one who decides how banks behave, how digital payments work, and what happens when fraud hits. It thinks ten steps ahead. Here’s how.
Banks don’t get to play freely. The RBI gives them rules that protect their money. For example, the RBI's KYC (Know Your Customer) rule stops fake accounts. Each bank has to follow the cybersecurity frameworks issued by the RBI.
When Paytm Payments Bank had issues with data sharing and KYC gaps, the RBI acted fast. It stopped new onboarding and ordered a full audit. That’s how it controls risk.
With cyberattacks rising, the RBI tightened its grip. Now, all banks must:
This has stopped many big frauds before they spread.
People in villages can now use banking. That’s because of schemes like PMJDY, which the RBI supports. Nearly every adult Indian has a bank account today. More than 50 crore accounts are active under the Jan Dhan Yojana.
Policy | Year | Effect |
KYC Rule | 2016 | Reduced fake accounts by 70% |
Cyber Audit Mandate | 2021 | 24x rise in threat detection |
Moratorium on NBFCs | 2020 | Saved public deposits worth ₹90,00,00,00,000 |
While the RBI creates rules, NPCI builds the actual systems. It is like the engineer who makes India’s payment highway. The smoother your UPI or RuPay works, the better NPCI is doing its job.
NPCI’s biggest invention? UPI. No need for an account number, just a mobile and PIN.
In 2023-24, UPI processed 139.99 billion transactions worth ₹246.82 lakh crore. In comparison, cash transactions by ATMs are falling year on year.
Year | UPI Volume (billion) | ATM Transactions (crore) |
2022 | 74.04 | 57 |
2023 | 117.67 | 52.72 |
2024 | 139.99 | 48.83 |
UPI has now reached rural towns like Sitamarhi in Bihar and Kasargod in Kerala. That’s how deep its reach is.
RuPay now controls 65% of debit cards. It saves banks from paying Visa or Mastercard fees.
NACH (National Automated Clearing House) handles EMIs, salaries, and and subsidies. Every month, over ₹1,20,000 crore is moved without errors via NACH.
Year | UPI Volume (billion) | ATM Transactions (crore) |
2022 | 74.04 | 57 |
2023 | 117.67 | 52.72 |
2024 | 139.99 | 48.83 |
Even with top systems, fraud happens. But what counts is response time. RBI’s Digital Ombudsman framework forces banks to fix fraud in 90 days.
NPCI’s UPI Fraud Risk Engine (FRE) flags suspicious activity in real time. If someone sends ₹1,00,000 ten times a minute, it blocks instantly.
Event | Action Taken | Timeframe |
Sudden bulk UPI sends | FRE blocks ID | Within 10 seconds |
Credit card stolen | Bank notified via the RBI system | 2 minutes |
Fake subsidy claim | NACH reverses the transaction | 1 day |
These tools protect crores every day.
Both RBI and NPCI are upgrading. Here’s what they’re building now:
This means India’s financial net will become stronger, cheaper, and more secure.
Initiative | Owner | Goal |
CBDC | RBI | Replace high-value cash |
Voice Pay | NPCI | Payments without screen |
UPI Abroad | NPCI | Global India Stack |
India’s financial infrastructure isn’t safe just by chance. It takes smart planning, strict rules, and powerful systems. RBI builds the laws. NPCI builds the tech. Together, they guard the money of 140 crore Indians.
This is not just banking. This is the security grid that keeps India moving every single second.
Now, the next time your UPI beeps, remember, there's a full army behind it.
1. How does RBI handle digital payment fraud?
RBI forces banks to have internal fraud teams. Also, victims can file complaints to RBI Ombudsman. Banks must respond in 30 days or pay fines.
2. Is UPI safer than debit cards?
Yes. UPI has PIN, device lock, and backend tracking. Debit cards often have weaker fraud detection. NPCI updates UPI security every quarter.
3. Can I use UPI without the internet?
Yes. Use UPI Lite or *99#. You can send up to ₹200 per transaction offline.
4. What happens if I send money to the wrong account?
NPCI allows reversal within 24 hours if you report it. RBI also guides banks to refund fast in genuine mistakes.
5. How can small businesses benefit from UPI?
No setup cost, instant settlement, and lower MDR fees. Shops can grow fast using QR payments.
About the Author
LoansJagat Team
We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?
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