Establish Robust Systems To Curb Digital Frauds: RBI Guv To Banks

Establish Robust Systems To Curb Digital Frauds: RBI Guv To Banks

SUMMARY

The Governor also urged banks to enhance oversight over their third-party service providers for mitigation of the risks related to IT and cyber security

Malhotra also called on the banks to continue investing in technology and improve digital literacy

An RBI report claims that the number of online frauds in the country surged 334% YoY to 29,082 in FY24

Reserve Bank of India (RBI) governor Sanjay Malhotra has advised banks to establish robust and proactive systems to curb rising digital frauds in the country. 

The RBI governor also urged the financial institutions to enhance oversight over their third-party service providers for mitigation of the risks related to information technology (IT) and cyber security. He also called on the banks to continue investing in technology and improve digital literacy. 

The governor made the comments during a meeting with the top executives of both public and private sector banks on January 27 in Mumbai. Besides Malhotra, deputy governors Rajeshwar Rao, T Rabi Sankar and Swaminathan Janakiraman also attended the meeting.

“These interactions are part of the Reserve Bank’s continuous engagement with the senior management of its supervised entities,” said the central bank in a statement.

The remarks come at a time when Indian government institutions as well as private players are facing a volley of cyber attacks. As per reports, India lost INR 177.05 Cr to cyber frauds in the financial year 2023-24 (FY24), more than double compared to INR 69.68 Cr in FY23. An RBI report also claimed that the number of online frauds in the country surged 334% year-on-year (YoY) to 29,082 in FY24.

Just last year, a ransomware attack on C-Edge Technologies, which provides banking technology systems to small banks across the country, temporarily shut down payment systems across nearly 300 small local banks.

In September 2024, the official YouTube channel of the Supreme Court was hacked to display videos that promoted a cryptocurrency developed by US-based company Ripple Labs. Meanwhile, the Centre has stepped up efforts to curb such cases. 

Last year, Home Minister Amit Shah said that the government was looking to create a central registry of suspects to crackdown on the rising instances of cyber crimes in the country. Meanwhile, the government has also set up ‘Citizen Financial Cyber Fraud Reporting and Management System’, which has helped save more than INR 2,400 Cr from being syphoned off by fraudsters.

In December, fintech unicorn Razorpay joined forces with the Ministry of Home Affairs (MHA) and Indian Cyber Crime Coordination Centre (I4C) to raise awareness about cybersecurity across India.

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