In a proactive move against the rising tide of financial frauds, the Finance Ministry is advocating for an upgraded Know Your Customer (KYC) process and thorough due diligence by banks and financial institutions. This initiative aims to protect customers from cyber risks, particularly targeting scams like those associated with the BoB World app.
Sources within the ministry have highlighted the necessity of stringent scrutiny of merchants and Business Correspondents (BCs), especially in rural and remote areas where the financial ecosystem can be vulnerable. Strengthening data security and protection at the merchant and BC level has been identified as crucial, given the higher likelihood of compromise in these areas.
As per reports, the Reserve Bank of India (RBI) may advise banks to reassess the concentration of BCs in cyber fraud hotspots and their procedures for onboarding and blocking micro ATMs implicated in fraudulent activities.
These recommendations were put forth during an inter-ministerial meeting focused on enhancing cybersecurity and combating financial frauds, according to sources familiar with the discussions.
During the year 2023, a staggering 11,28,265 cases of financial cyber fraud amounting to Rs 7,488.63 crore were reported, based on data compiled by the National Crime Records Bureau (NCRB).
To bolster the country’s capability in tackling cyber crimes comprehensively, the central government, through the Ministry of Home Affairs, has established the ‘Indian Cyber Crime Coordination Centre’ (I4C) dedicated to addressing various forms of cybercrime.
In a bid to curb the proliferation of illegal lending apps, the Reserve Bank of India is contemplating the establishment of a Digital India Trust Agency (DIGITA). This proposed agency would facilitate the verification of digital lending apps and maintain a public register of verified apps, sources revealed.
Meanwhile, as part of its efforts to combat the issue, the RBI has furnished a list of 442 unique digital lending apps to the Ministry of Information Technology for whitelisting with Google.
Google, in response, has taken action by removing over 2,200 digital lending apps (DLAs) from its app store between September 2022 and August 2023. The tech giant has updated its policy regarding the inclusion of loan apps on the Play Store, now permitting only those apps published by RBI-regulated entities (REs) or those operating in collaboration with REs.
This policy adjustment by Google comes in response to requests from both the Reserve Bank of India (RBI) and the Department of Financial Services (DFS) under the finance ministry, signaling a concerted effort to combat financial fraud in the digital space.
