New Delhi, April 14 -- Recent proposals by the Reserve Bank of India to curb digital fraud could disrupt payments and hurt small merchants' cash flows while proving insufficient to combat the growing problem, several industry experts told Mint.

In a discussion paper floated on 9 April, the RBI proposed introducing a one-hour lag at the payer's end for transactions above Rs.10,000. Other suggestions included:

Industry leaders said the RBI's current 'safety net' approach addresses the symptoms rather than the cause. Abhinav Parashar, co-founder and CEO of Digio, said. "Time delays and trusted persons are purely downstream safety nets; they only trigger after a victim has already been manipulated. While these are vital circuit breakers, th...