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RBI to create a fraud registry in effort to combat financial crime

By Puja Sharma

September 05, 2022

  • AI
  • Anti-Fraud Solutions
  • Central Bank
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RBI, Fraud

Accordingly, the booklet “Be(A)ware” released by the RBI aims to enhance public awareness about various types of financial fraud perpetrated on gullible customers while carrying out digital payments and other financial transactions. The central bank revealed, inter alia, that sharing of confidential information by the customers, knowingly or unknowingly, is one of the major causes leading to financial fraud.

In a recent announcement, the Reserve bank of India is working on setting up a fraud registry to check online frauds,

The RBI said in a statement said that the surge in the digital modes of payments witnessed in the past few years gained further momentum during the COVID-19-induced lockdowns. Digital payments enhance customer convenience by improving the ease of doing financial transactions. They also contribute to the promotion of financial inclusion. However, fraudsters are finding new ways to defraud the gullible public through various ingenious methods.

A root cause analysis of the complaints received at Ombudsmen Offices and the Consumer Education and Protection Cells (CEPCs) of RBI revealed, inter alia, that sharing of confidential information by the customers, knowingly or unknowingly, is one of the major causes leading to the financial frauds.

Accordingly, the booklet “Be(A)ware” released by the central bank aims to enhance public awareness about various types of financial fraud perpetrated on gullible customers while carrying out digital payments and other financial transactions.

The booklet elaborates on safeguards against commonly used fraudulent techniques, such as SIM swaps, vishing/phishing links, lottery, etc., including fake loan websites and digital apps.

Parts A and B of the booklet detail the commonly observed modus operandi and precautions to be taken against fraudulent transactions relating to banks and non-banking financial companies (NBFCs), respectively. Part C of the booklet explains the general precautions and digital hygiene to be followed by the public. The final section contains a glossary of commonly used terminologies in the performance of financial transactions with banks and other regulated entities of RBI to improve understanding thereof among the public.

The booklet emphasises the need for keeping one’s personal information confidential at all times, being mindful of unknown calls/emails/messages, etc., and also outlines the due diligence measures to be followed while undertaking financial transactions.

Ranjan R Reddy, Founder, and CEO of Bureau, a platform that provides a safety net to businesses, solving cyber fraud risks with its AI-powered solutions said, “This is a necessary initiative by RBI to improve trust in the digital economy, in line with its Payment’s vision for 2025. While the Central Fraud Registry and Central Payment Fraud registry exists already, this new source of verified identities will facilitate a comprehensive outlook on multiple fraud use cases. As digital identifiers can be spoofed, and require behavioral data as well for precision, the challenge here would be to ensure accuracy with real-time exchange with multiple stakeholders. Overall, this is a significant step in securing Indian digital infrastructure from cyber frauds and enabling trust.”

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