The government is planning to implement several measures to tackle the increasing problem of cyber fraud in the financial sector. These measures include blocking the unique mobile device identifier (IMEI) and imposing limits on withdrawals from suspicious accounts to prevent their misuse in future incidents, a TOI report stated.
Following a meeting with representatives from the Reserve Bank of India (RBI), Telecom Regulatory Authority of India (TRAI), National Payments Corporation of India, and the Ministry of Information Technology, Vivek Joshi, the Secretary of Financial Services, highlighted the need to address “inert” and “mule” bank accounts. These accounts typically have low balances but experience sudden surges in activity. To combat such fraudulent activities, options such as placing caps on fund transfers or withdrawals are being discussed.
Mule accounts are often utilized by fraudsters to collect or transfer funds. In cases of cyber fraud, the stolen money is frequently routed through multiple accounts before being withdrawn. This makes it challenging for law enforcement agencies and banks to take prompt action.
Additionally, the meeting in the finance ministry discussed the proposal to whitelist digital lending apps. This means that only apps that are whitelisted will be allowed on App Store or Google Play Store. The implementation of the Banning of Unregulated Lending Activities (BULA) Act was also on the agenda.
Banks have been urged to improve their response time in handling alerts on online financial frauds from various agencies. Efforts are underway to explore better coordination between the police and banks to prevent fund transfers, sources revealed.
To combat Aadhaar-enabled payment system (AePS) related frauds, Joshi emphasized the need for state governments to safeguard citizens’ Aadhaar data and prevent its misuse. UIDAI has already taken steps to address this issue as it observed that several states were sharing property registration details, including fingerprints, on public websites.
Furthermore, discussions revolved around enhancing fraud management systems of banks, standardizing the KYC process for merchants, and ensuring all financial institutions are registered with the RBI. Joshi highlighted the importance of a standardized format for the exchange of information between the Indian Cyber Crime Co-ordination Center (I4C) and various banks. Banks have also been instructed to designate a nodal officer in each zone to address cyber fraud-related complaints.
During the meeting, the I4C presented recent statistics on digital payment frauds reported in the National Cyber Crime Reporting Portal (NCRP), outlining the challenges faced in tackling such matters. The meeting took place in response to instances of digital fraud at UCO Bank and Bank of Baroda.
The telecom department has also blocked 70 lakh mobile numbers involved in suspicious activities, Joshi disclosed. Blocking the IMEI, which serves as a unique identification number for smartphones, usually disables mobile services such as calls, messages, and data access.
