NEW DELHI: The government is considering deploying a series of measures to curb the growing menace of cyber frauds in the financial sector, including blocking the IMEI, the unique number of mobile devices, and restricting withdrawals from suspicious accounts to prevent its use in future incidents.
After a meeting with representatives from RBI, TRAI, National Payments Corporation of India and the IT ministry, financial services secretary Vivek Joshi said that one of the targets was “inert” and “mule” bank accounts, which have low balance but see a sudden surge. In these cases, caps on transfer or withdrawal of funds are options that are discussed.
Mule accounts are those that are used by fraudsters to collect or transfer funds. In case of cyber frauds, money siphoned off from an account is often routed through multiple accounts and withdrawn, making it tough for law enforcement agencies and banks to act.
Besides, a proposal to “whitelist” digital lending apps was among options discussed at a meeting in the finance ministry, amid an unprecedented rise in cyber frauds. This means that only the apps that are whitelisted will be allowed on App Store or Google Play Store. The finance ministry said the implementation of a new legislation, Banning of Unregulated Lending Activities (BULA) Act, was also on the agenda.
Banks have been asked to improve the response time in handling alerts on online financial frauds received from different agencies. Besides, options are being explored to see if the police and banks can coordinate better to check transfer of funds, sources said.
To prevent Aadhaar-enabled payment system (AePS) related frauds, Joshi said that the state governments will be directed to make sure that Aadhar related data of citizens are kept protected and not put out in the public domain. Already, UIDAI has initiated steps in this direction as it noticed that several states were putting property registration details on the website, including fingerprints, which were often being misused.
Other measures, such as stepping up due diligence of fraud management systems of banks, standardising KYC process for merchants and ensuring all financial institutions are registered with the RBI were discussed. “The exchange of information between Indian Cyber Crime Co-ordination Center (I4C) and various banks has to be done in one particular format,” said Joshi, adding that banks have been asked to assign a nodal officer at every zone to help in addressing cyber fraud-related complaints.
During the meeting, the I4C made a presentation on the recent statistics of digital payment frauds as reported in National Cyber Crime Reporting Portal (NCRP), including challenges and issues faced in tackling such matters. The meeting comes in the wake of instances of digital fraud at UCO Bank and Bank of Baroda.
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Over the past few months, the telecom department has blocked 70 lakh mobile numbers involved in suspicious activities, Joshi said. An IMEI or international mobile equipment identity is a unique identification number that all smartphones have, blocking IMEI usually disables mobile services like making calls, sending messages and accessing mobile data.
