Mumbai: The Reserve Bank of India (RBI) is developing an artificial intelligence-driven platform to monitor and flag suspicious activity in digital transactions. The initiative, called the Digital Payments Intelligence Platform, is designed to strengthen fraud detection as India’s digital payments market expands rapidly.
RBI Executive Director Sanjay Malhotra said after the Monetary Policy Committee meeting that a prototype of the system is currently being developed by the central bank’s innovation hub. A separate entity will be created to operate the platform once it is launched. Malhotra explained that the system will collect data from multiple sources and train an AI model to identify potentially risky transactions in real time. Based on alerts generated by the system, banks or customers will be able to decide whether to proceed with a flagged transaction.
Malhotra emphasised that while the overall incidence of fraud in platforms such as UPI remains low, the rising volume of transactions makes continuous monitoring essential. According to data from the National Payments Corporation of India (NPCI), UPI transactions crossed Rs 14 trillion in September 2025 alone.
The RBI has not yet provided a rollout timeline, but the development of the prototype marks an important step in preparing the payments ecosystem for future risks. The central bank’s move comes amid increasing concerns over cyber fraud and the need for robust mechanisms to balance financial inclusion with security.
By building a centralised intelligence system, the RBI is aiming to support banks and payment operators with early warnings that could reduce fraud-related losses and improve trust in digital transactions.
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