According to insiders, the finance ministry is pushing for a more stringent KYC process and thorough due diligence on the part of banks and other financial institutions when onboarding merchants in an effort to reduce the frequency of financial scams like the BoB World app scam.
Furthermore, as per the experts, it is essential to do appropriate due diligence on merchants and Business Correspondents (BCs) who provide banking services in rural and distant locations in order to prevent fraud and strengthen the financial ecosystem. Sources claim that since there is a greater risk of compromise at the level of merchants and BCs, there is a need to enhance data security and protection at that level.
As a result, according to sources, the RBI may advise banks and other financial institutions to examine how many BCs are present in cyber fraud hotspots, how they are onboarded, and how to prevent micro ATMs that are linked to fraudulent activity.
According to insiders, this was one of the recommendations made during a recent interministerial conference aimed at advancing cyber security and thwarting financial fraud.
National Crime Records Bureau (NCRB) statistics shows that 11,28,265 incidents of financial cyberfraud totaling Rs 7,488.63 crore were registered in 2023.
The Indian Cyber Crime Coordination Centre (I4C) was established by the federal government through the Ministry of Home Affairs to enhance the framework for dealing with cyber crimes in a thorough and coordinated manner. The I4C is responsible for handling all forms of cyber crime in the nation.
In an attempt to combat the increasing prevalence of cybercrime, the Reserve Bank is thinking of creating a Digital India Trust Agency (DIGITA) to halt the growth of illicit lending applications.
According to insiders, the planned organization would make it possible for digital lending applications to be certified and will keep a public list of approved apps.
A list of 442 distinct digital lending applications has been given by the Reserve Bank of India with the IT Ministry for Google to whitelist. In addition, between September 2022 and August 2023, Google withdrew approximately 2,200 digital lending applications (DLAs) from its app store.
The search engine behemoth has modified its guidelines for the Play Store's enforcement of loan applications, allowing only those developed by regulated enterprises (REs) under the RBI's guidelines or in collaboration with REs. The Reserve Bank of India (RBI) and the Department of Financial Services (DFS), which is part of the finance ministry, requested that Google amend its policy.
