Lok Sabha Question No. 2169 (UNSTARRED), answered on 2017-03-15
Subject: Risk in Cashless Payments
Ministry: ELECTRONICS AND INFORMATION TECHNOLOGY
Asked by: ANANT KUMAR DATTATREYA HEGDE, RAM KUMAR SHARMA KUSHWAHA

## GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS AND INFORMATION TECHNOLOGY

## LOK SABHA UNSTARRED QUESTION NO. 2169

TO BE ANSWERED ON: 15.03.2017

## RISK IN CASHLESS PAYMENTS

## 2169    SHRI ANANTKUMAR HEGDE: SHRI RAM KUMAR SHARMA:

Will the Minister of Electronics & Information Technology be pleased to state:-

- (a) whether with the rising trend of cashless payments, the possibility of financial frauds, embezzlement and scams in this sector has increased;
- (b) if so, the details thereof;
- (c) whether the Government has developed any concrete system to compensate the financial losses suffered by common man due to these scams and embezzlement;
- (d) if so, the outline of the scheme;and
- (e) if not, the reasons therefor?

## ANSWER

## MINISTER OF STATE FOR ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI P.P. CHAUDHARY)

(a) and (b)  : With the proliferation of Information Technology and related services there is a rise in number of cyber security incidents in the country like elsewhere in the world.  As per the information reported to and tracked by Indian Computer Emergency Response Team (CERT-In), a total no. of 44679, 49455 and  50362  cyber security incidents were  observed  during    the  year  2014,  2015  and  2016  respectively.  The  types  of  cyber  security  incidents  include phishing, scanning/probing, website intrusions and defacements, virus/malicious code, Denial of Service attacks, etc. Over a period of time, the nature and pattern of incidents are becoming more sophisticated and complex.

As per information available from Reserve Bank of India (RBI), details of cybercrimes reported (i.e. fraud reported in Credit Cards/ATM/Debit Cards and Internet Banking Categories) during the last two years and the percentage increase in such crimes during the said period is given below:

## Details of fraud reported in Credit Cards/ATM/Debit Cards and Internet Banking Categories

| Years             | 2015          | 2015                        | 2016          | 2016                        | %increase/ decrease   | %increase/ decrease         |
|-------------------|---------------|-----------------------------|---------------|-----------------------------|-----------------------|-----------------------------|
| Area of operation | No. of frauds | Amount involved (in Rs. mn) | No. of frauds | Amount involved (in Rs. mn) | No. of frauds         | Amount involved (in Rs. mn) |
| Credit Cards      | 10134         | 484.88                      | 7751          | 339.76                      | -23.51                | -29.93                      |
| ATM/Debit Cards   | 5546          | 264.76                      | 6996          | 416.42                      | 26.14                 | 57.28                       |
| Internet Banking  | 53            | 55.21                       | 77            | 21.78                       | 45.28                 | -60.55                      |
| Grand Total       | 15733         | 804.85                      | 14824         | 777.95                      | -5.78                 | -3.34                       |

In  terms  of  RBI  Circular  no.  DBS.CO/CSITE/BC.11/33.01.001/2015-16  dated  June  2,  2016  on  Cyber  Security Framework in Banks, banks have been advised to report all unusual cyber security incidents to RBI within 2 - 6 hours of detection.

(c), (d) and (e):   The matter pertaining to compensation to customers has been addressed in para 17.2 ( Compensating the customer) of RBI circular DBOD No.Leg.BC.21/09.07.006/2014-15 July 1, 2014 which reads as under:

(i) In  case  of  any  fraud,  if  the  branch  is  convinced  that  an  irregularity  /  fraud  has  been  committed  by  its  staff towards any constituent, the branch should at once acknowledge its liability and pay the just claim, (ii) in cases where banks are at fault, the banks should compensate customers without demur, and (iii) in cases where neither the bank is at fault nor the customer is at fault but the fault lies elsewhere in the system, then also the banks should compensate the customers (up to a limit) as part of a Board approved customer relations policy.

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