Internet banking frauds in India are on rise. However, legal issues of internet banking in India are still not governed by a full fledged law. For instance, we have no dedicated Internet banking laws in India but the Reserve Bank of India (RBI) has issued some guidelines in this regard. However, Internet banking guidelines in India by RBI are not sufficient to make the banks follow robust and required cyber security procedures.
This means that Internet banking risks in India are high and even RBI acknowledged risks of e-banking in India. Despite this position, banks in India are ignoring the cyber security due diligence requirements prescribed by RBI. The online banking risks in India have increased tremendously due to this position.
Cyber security of banks in India is also not upto the mark. The mobile banking cyber security in India is also missing. The preventive measures for ATM frauds in India are also missing. The truth is that Indian banks are poor at cyber security. The online banking risks in India are increasing due to this indifference towards cyber security.
RBI has already issued guidelines pertaining to national electronic funds transfer (NEFT) system of India but banks in India are not providing positive confirmations of NEFT transactions. RBI’s ombudsman office is already flooded with ATM related complaints in India.
Once again online banking fraud has surfaced in India. A local bank in Mumbai, which had a current account in another bank, become a victim of online fraud when Rs 1.05 crore was siphoned off from its account through Real-Time Gross Settlement (RTGS). This was not an easy task to manage on the part of fraudsters yet this happened.
The RTGS system involves many security features that cannot be bypassed easily. In RTGS system the payment is initiated only after the customer gives a written request for the same. To bypass this requirement the fraudsters managed to break into the bank’s online security apparatus and within an hour transferred the Rs 1.05 crore into 12 different accounts through RTGS. The money was immediately withdrawn from those accounts through credit cards and other means.