 "RBI steps up focus on cyber security & fraud prevention")
Reserve Bank of India (RBI) has pressed the pedal on handling cyber security risks and of stemming other instances of fraud in the banking system. In fact, the regulator has been increasingly focusing on tackling cyber crime at a time, when digital transactions have been on a rise.
S S Mundra, deputy governor, RBI said: "With increasing concerns around cyber security, last year on a pilot basis we started to inspect few banks separately on cyber security this year the coverage is being expanded to more than 30 banks and we intend to cover each bank going forward."
A few months ago the regulator had directed banks to formulate policies pertaining to cyber security and had asked them to strengthen up the mechanism to ensure a resilient framework. It had stated that the number, frequency and impact of cyber attacks have increased manifolds in the past few months.
Lenders have been advised by the central bank to improve their current defences in addressing the risks emerging in this segment as the entry barriers are getting lowered but on the contrary while motivation and resourcefulness of these cyber threats have been increasing. The banks have been directed that these laws with regard to cyber security should be distinct from the broader IT laws that are in place.
RBI has its guns trained not only on cyber related attacks but on the overall rising fraud risks in the system and now has a special team dedicated to ensure that these frauds can be curtailed and resolved more efficiently.
"The rising frauds in the system we have set up a special cell in the supervisory department to track the large-sized frauds and to actively co-ordinate with other agencies so that they can be taken to the logical conclusion," added Mundra.
This comes on the heels of reports suggesting that the ATM card details of several account holders may have been compromised. In fact, following this several banks had asked their customers to change their card pin details and had also asked them to stick to their own bank’s ATM network.
Apart from this, RBI is also looking at reviewing and expanding the scope of the banking Ombudsman scheme that allows consumers to escalate their complaints to this consumer protection watchdog. This comes at a time when concerns around mis-selling by banks and proper checks on following Know Your Customer (KYC) guidelines remain.
