Cyber Frauds threaten Digital Banking in India.

 

As an academician and professor of computer science, I am a keen observer of the evolution of cyberspace in India. Financial Inclusion with Digital Transactions is one such closely watched space. We everyday read in the media reports on how cyber criminals are cheating innocent and unsuspecting people, mostly from rural and poor class. Phishing is a cybercrime, where unsuspecting people are contacted by email, telephone or text message by criminals, posing as representatives of legitimate institutions to get sensitive banking information like Passwords, PIN, OTP, Bank Account No, Date of Birth and other KYC details. The information collected is used for siphoning money from their accounts through digital transactions. 

 

Inclusive Banking and Digital Payment revolution:

With digital payments soaring for everything from groceries, electricity bills, toll fees, cab fares and so on, the coronavirus pandemic may finally accomplish what demonetization failed to achieve four years ago. The Reserve Bank of India aims to increase digital transactions to about 15 % of GDP by 2021. Government always desired to push digital payments in India, where three in four consumer transactions are in cash. Now the government is aiming for a billion digital transactions per day. The world’s fastest-growing smartphone market empowers consumers to transact at the click of a button. India is at the cusp of a financial services revolution.  The Jan Dhan Yojna, a scheme of the Ministry of Finance,  provides financial services i.e. banking, saving & deposit services, remittance, credit, insurance and pension services to people hitherto were outside the banking system. Launched in 2014, it created history as the largest financial inclusion scheme. It found a place in Guinness World record by opening 31 crore bank accounts in just a few weeks. The scheme won recognition from the World Bank for financial inclusion.

 

Rise of organised syndicates and hubs of Cyber Criminals

As we celebrate this financial revolution, the cyber criminals are finding it a multi-million fraud opportunity. A new category of uneducated cyber criminals and syndicates is emerging from remote & rural areas.  Jamtara, a district in Jharkhand, figures so frequently during probes into financial frauds that it attracted the title of  cybercrime capital.  Jamtara became famous as a cyber crimes hub with uneducated youth indulging in cyber crimes en-masse, nexus with and protection from local politicians and ineffective law enforcement. The phishing scams became so popular, that crime thriller movies and series are now streaming on Netflix. 

Jan Dhan Yojna : Inclusive and digital  banking for masses:

The Jan Dhan Yojna accounts have it all, what needs to thrive for this new class of cyber criminals. Mostly poor, illiterate, unsuspecting, gullible, innocent bank account holders with all facilities of digital banking i.e. RuPay debit card, cash withdrawal through ATM, simplified fund transfer facility and liberal KYC norms. . It provides for mobile banking from not just smartphones, but also through regular mobile phones. The accounts have overdraft limits up to Rs 5000. The scheme is offered by most public and private sector banks. During the coronavirus pandemic the scheme has been the main channel for fund transfer to the poor and rural masses by central and state governments.  

 

The cyber criminals capitalize on the ignorance of victims regarding safety precautions required for digital financial and banking transactions. The cyber criminals use  tele-calling, SMS, emails or mobile apps for obtaining banking sensitive private information like Adhar Card, date of birth, bank account number, debit card details or mobile number etc from innocent victims. They manipulate victims to share their OTP, net banking passwords, ATM PIN with them. The criminals create luring marketing offers or prize winning schemes for victims. We read stories of luring victims through attractive offers with reference to Covid-19, such as miracle cures, herbal remedies, vaccinations, faster testing etc. The unfortunate migrant labor is cheated with job offers. 

 

Rising trend of cyber crimes during pandemic:

Kolkata police reported a 15 % rise in cyber crimes during June in comparison to March and the trend continues through July. The spurt is attributed to business transactions mostly being carried out online. The KYC fraud is common and rampant, reports the Kolkata police. They are getting multiple cases each week across all police stations. It has also released a video, warning Kolkatans of rising cyber crimes, which is trending on social media. The story and trend is the same in the rest of the country. Cybercrime is rising. 

 

Inadequate Government response to control cyber crimes:

Though , the Indian Cyber Crime Coordination Centre (I4C) functioning under the Ministry of Home Affairs has launched a cyber crime reporting portal as a joint cyber crime investigation platform for law enforcement agencies, but the graph of cyber crimes in India is in continuous uptrend across states and metropolitan cities. The MHA however is only a coordinating agency. The enforcement and detection of crime is with stage police authorities, who are insensitive, ill equipped &  untrained to handle high high tech crimes. The Ministry of Electronics and Information Technology (MEITY) is  yet to come with comprehensive and technology based solutions to check the menace of cyber crimes. We need dynamic laws and continuous amendments as the technology is fast changing. The MEITY however looks clueless.   

 

What needs to be done:

The increasing graph of cyber frauds is a serious threat to digital financial transactions in India. We need to proactively work on a). Creating awareness is the best prevention. Educating the Jan Dhan account beneficiaries about security protocols and precautions in financial transactions is important. The banking system should educate its beneficiaries and upgrade cyber security as we progress. the banks should lead and educate customers about the steps required for security of digital financial transactions. b) Investigating Officers,Government lawyers and Judicial Officers need to be trained in collection, presentation and evaluation of digital evidence, to effectively prosecute the cyber criminals. c) Knowing the difficulties in detection and prosecution of such crimes, stringent and deterrent penal provisions are one part of strategy.  

 

We truly need to work on digital India, where cyber security becomes an integral part of our national security. We still have a long way to go …

 

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 Prof. (Dr.) Divya Tanwar

(Profile: Distinguished academician with long experience of teaching computer science. Authored  books on DBMS and Network Security. Expert on Cyber Crimes. Presently She is Director, Sanskriti University)