what is cooling period limit

A cooling period limit is a time and amount limit set by a bank during which fund transfer is not allowed or allowed till the specified limit to a newly added payee or beneficiary. The cooling period varies from bank to bank and can range from 30 minutes to 4 days. During this period, the bank authenticates the beneficiary details and approves the beneficiary for transactions. The cooling period is implemented to decrease the chances of fraud and to ensure that the account and its funds are secure. Once the beneficiary is successfully registered, the cooling period ends, and the beneficiary is activated for transactions. The cooling period limit can be set up by the bank administrator using the limit package maintenance feature.