Indian govt plans ‘Kill switch’ feature to fight digital arrest:It is proposed to let users instantly freeze all bank and UPI transactions when they sense fraud

The Indian government is now discussing a “kill switch” inside UPI and banking apps that can instantly block all payments when a user senses fraud. With online scams becoming faster, scarier, and more convincing, the focus is shifting from only catching criminals later to helping people protect themselves in the moment.
According to a report by The Indian Express, a high-level committee under the Ministry of Home Affairs (MHA) is examining how such a feature could be built into India’s digital banking system. What exactly is this ‘Kill Switch’? The proposed kill switch is meant to be a single emergency option inside bank and UPI apps. If someone feels they are being targeted by a scam, they can press this button and immediately stop all outgoing transactions from their account.
In simple terms, it acts like a panic button for your money. Once activated, payments are paused, giving the user time to think clearly, speak to family members, and contact their bank or the cybercrime helpline before any more damage is done. The idea is to give users an instant way to halt transactions the moment they sense fraud An official involved in the discussions told The Indian Express. Officials are also exploring whether banks can automatically flag suspicious activity early, so that money is not quickly spread across many different “mule” accounts, which makes recovery almost impossible. Also read: Deals you shouldn’t miss during Amazon-Flipkart Republic Day Sale

Why does the government feel this is urgently needed The main trigger behind this proposal is the sharp rise of ‘digital arrest’ scams across the country. These scams rely heavily on fear and psychological pressure rather than technical hacking. Typically, fraudsters pose as police or CBI officers on video calls, show fake arrest warrants or ID cards, and accuse victims of being involved in serious crimes. Victims are told they must cooperate immediately, often staying on long calls while being instructed to transfer money again and again. Because people are scared and confused, they don’t get the chance to verify anything. By the time they realise the truth, their savings are already gone. Losses from such scams are estimated to be close to ₹3,000 crore nationwide, which is why the Supreme Court also took suo motu notice of the issue last year, the report said. This has pushed authorities to look for solutions that work before money leaves the account, not just after complaints are filed. Also read: Japan resumes world’s largest nuclear plant since 2011, 15 years after Fukushima disaster

Who is working on this plan? To deal with the growing threat of cyber-enabled fraud, the government formed an inter-departmental committee in December. It includes senior officials from several key bodies, such as: The committee is chaired by the MHA’s Special Secretary (Internal Security), while the CEO of I4C acts as Member-Secretary. A status report has already been submitted to the Supreme Court, confirming that multiple meetings have taken place to discuss possible solutions, including the kill switch. Separately, MeitY has also held meetings with major tech platforms like Google, WhatsApp, Telegram, and Microsoft, along with officials from law enforcement agencies, to understand how scams spread and how platforms can help slow them down. What if money is already lost? Insurance could be the next step Alongside the kill switch, the committee is also discussing whether insurance can play a larger role in protecting victims of digital fraud. Right now, most people who lose money to scams struggle to recover it. Existing cyber insurance products usually focus on system hacks, not cases where users are emotionally manipulated into transferring money themselves. RBI data cited in the report shows that in 2024–25 alone, nearly 24,000 fraud cases involving over ₹34,000 crore were recorded. With numbers like these, experts believe fraud should be treated as a financial system risk, not just an individual problem. That is why a pooled insurance model is being discussed, where banks and insurers share responsibility, and victims can get at least partial compensation. RBI has also suggested studying a Digital Payment Protection Fund under its Payment Vision 2025 plan.
However, officials say any such insurance framework would require the insurance regulator IRDAI to step in before it can become policy. Also read: Scientists discover viruses trained in space better at killing bacteria

Why this could change how India fights online scams India’s digital payment boom has made daily life easier, but it has also created new opportunities for criminals. As scams become more organised and psychologically manipulative, simply telling users to “be careful” is no longer enough. The kill switch aims to give people control at the most critical moment, when fear usually takes over. Insurance, on the other hand, would acknowledge that even careful users can be trapped, and that the system must share responsibility for protecting them. Together, these ideas suggest a shift in thinking, from blaming victims to building safety into the digital payment ecosystem itself. As The Indian Express noted, if these measures are implemented, digital fraud will no longer be treated only as a policing issue, but as a serious financial and systemic risk that needs built-in safeguards.