India lost an estimated $2.5bn to digital payment fraud in 2025, marking a staggering 4,300% increase since 2021, as cybercriminals exploited fear, urgency and low digital awareness to dupe millions of users, according to a BBC report.

The scale of losses has prompted the Reserve Bank of India (RBI) to consider new curbs aimed at slowing down fraudulent transactions in a country where digital payments have grown far faster than digital literacy.

One such victim is Alok, a business analyst in the western Indian city of Pune. In February, he received what appeared to be an official text message asking him to pay a 1,000-rupee speeding fine, warning that failure to act could result in his driving licence being suspended. Acting quickly, Alok clicked the link and entered a one-time password (OTP). Minutes later, his credit card was debited $3,225, the maximum transaction limit.

Alok had unknowingly authorised a fraudulent payment via a phishing link mimicking official government platforms. Experts describe such scams as “social engineering”, in which fraudsters manipulate victims psychologically by creating panic or urgency.

With nearly 2.5 million people affected in a single year, the RBI earlier this month released a discussion paper proposing measures to curb digital fraud. These include a one-hour delay on account-to-account transfers, additional authentication through a “trusted person” for high-value transactions, and stricter monitoring of large account credits to detect so-called mule accounts used for illegal fund transfers.

While experts have welcomed the RBI’s renewed focus, many caution that fraud tactics are evolving rapidly and that regulation alone will not be sufficient. They argue that stronger digital literacy and inter-agency coordination will be crucial to curb losses running into billions, the BBC reported.