Technology
RBI mandates time‑based auto‑locking OTP for high‑value online banking transactions
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The Reserve Bank of India has directed banks to implement a new time‑based auto‑locking OTP system for large internet transactions to curb cyber fraud.
The Reserve Bank of India (RBI) has issued a directive requiring all banks to adopt a time‑based auto‑locking one‑time password (OTP) mechanism for high‑value online banking transactions. The move aims to strengthen security and reduce the incidence of cyber fraud targeting banking customers.
Under the new protocol, OTPs will be automatically locked after a short, predefined time window, preventing reuse or delayed entry that could be exploited by fraudsters. The system will be mandatory for internet transactions involving substantial amounts, though the RBI has not disclosed specific thresholds.
Banking institutions are expected to integrate the auto‑locking feature into their existing digital platforms within the stipulated compliance period. The RBI believes that the enhanced OTP security will deter fraudulent activities and protect consumers’ funds.
The directive reflects the central bank’s broader focus on cybersecurity in the financial sector, following a series of high‑profile online fraud cases. Banks are urged to ensure seamless implementation to avoid disruption to customer services while bolstering transaction safety.
Under the new protocol, OTPs will be automatically locked after a short, predefined time window, preventing reuse or delayed entry that could be exploited by fraudsters. The system will be mandatory for internet transactions involving substantial amounts, though the RBI has not disclosed specific thresholds.
Banking institutions are expected to integrate the auto‑locking feature into their existing digital platforms within the stipulated compliance period. The RBI believes that the enhanced OTP security will deter fraudulent activities and protect consumers’ funds.
The directive reflects the central bank’s broader focus on cybersecurity in the financial sector, following a series of high‑profile online fraud cases. Banks are urged to ensure seamless implementation to avoid disruption to customer services while bolstering transaction safety.