Lok Sabha Question No. 1329 (UNSTARRED), answered on 2022-07-25
Subject: Online Banking Frauds
Ministry: FINANCE
Asked by: Pradeep Kumar Chaudhary

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA

## UNSTARRED QUESTION NO†1329

ANSWERED ON- 25/07/2022

## ONLINE BANKING FRAUDS

## †1329 . SHRI PRADEEP KUMAR CHAUDHARY

Will the Minister of FINANCE be pleased to state:-

- (a) the existing policy of the Government to stop online banking frauds;

(b) whether  the  Government  has  any  proposal  to  create  separate  portal  for  redressal  of grievances of digital banking frauds; and

(c) if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (DR. BHAGWAT KARAD)

(a)  to  (c): As  per  Reserve  Bank  of  India  (RBI)  guidelines  on  ' Customer  Protection -Limiting  Liability  of  Customers  in  Unauthorised  Electronic  Banking  Transactions ',  banks are instructed to design systems and procedures to make customers feel safe about carrying out electronic banking transactions, and banks must put in place -

- (i) appropriate systems and procedures to ensure safety and security of electronic banking transactions carried out by customers;
- (ii) robust and dynamic fraud detection and prevention mechanism;
- (iii) mechanism for assessment of the risks and measurement of the liabilities resulting from unauthorised transactions;
- (iv) appropriate measures to mitigate the risks and protect themselves against the liabilities arising therefrom; and
- (v) a system  of continually and  repeatedly advising  customers  on  how  to  protect themselves from electronic banking and payments related fraud.

Also, banks are required to  set up internal control  systems  to  combat frauds and actively participate  in  fraud  prevention  committees/  task  forces  which  formulate  laws  to  prevent frauds and take proactive fraud control and enforcement measures.

In  addition  to  this,  a  number  of  steps  have  been  taken  to  enhance  security  of  digital payment transactions, including those of card  transactions,  online  transactions etc. ,  and  to reduce online banking frauds which include, inter alia , the following -

- (i) conversion of magnetic strip card to EMV chip and PIN cards;
- (ii) mandating enablement of online alerts for all transactions;
- (iii) certification of merchant terminals;
- (iv) mandating PIN entry for all ATM transactions
- (v) enabling all ATMs for processing EMV chip and PIN cards;
- (vi) restricting international usage by default and enablement of the same only after specific mandate from the customer;
- (vii) Capping the value/mode of transactions/beneficiaries;
- (viii) setting daily limits; and
- (ix) issuing alerts upon addition of beneficiaries.

In reference to the portal for redressal of grievances, RBI vide its circular dated 12.11.2021, has integrated its existing three Ombudsman schemes into 'One Nation One Ombudsman' approach,  making  the  Ombudsman  mechanism  jurisdiction  neutral,  to provide  costfree  redressal  of  customer  complaints  involving  'deficiency  in  services', including the unauthorised electronic fund transfer rendered by entities regulated by RBI. The complaints under the Scheme  made  online are registered on the Complaint Management System (CMS) portal (https://cms.rbi.org.in),  and  a  Centralised  Receipt  and Processing Centre has been set up at RBI, Chandigarh for receipt and initial processing of physical and email complaints in any language.

Further,  RBI has informed  that it has  implemented a web-based fraud reporting solution called Central Payments Fraud Information Registry (CPFIR) since 23.3.2020. All payment related  frauds,  including  those  undertaken  using,  credit  card,  debit  card,  paper-based instruments and Prepaid Payment Instrument (PPI), etc. , either reported by the customer to the Issuer Banks / PPI Issuers (bank or non-banks) or detected by the bank / non-bank entities themselves, are required to be reported to the CPFIR.

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