Lok Sabha Question No. 1718 (UNSTARRED), answered on 2023-07-31
Subject: Frauds in Digital Marketing and Banking Sector
Ministry: FINANCE
Asked by: Rahul Kaswan

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO†1718 ANSWERED ON 31 st  JULY, 2023 / SRAVANA 9, 1945 (SAKA)

## FRAUDS IN DIGITAL MARKETING AND BANKING SECTOR

## †1718 . SHRI RAHUL KASWAN

Will the Minister of FINANCE be pleased to state:-

(a) whether the Government has conducted any survey of the frauds/irregularities taking  place  in  digital  marketing  and  banking  sectors  so  as  to  provide  financial facilities to the people;

- (b) if so, the details thereof;

(c) whether  the  Government  is  contemplating  to  formulate  any  new  policy  to check  the  frauds/irregularities  taking  place  in  digital  marketing  and  banking sectors; and

(d) if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (DR. BHAGWAT KARAD)

(a)  to  (d): Reserve  Bank  of  India  (RBI)  has  apprised  that  it  has  not  conducted specific  survey  in  regards  to  the  frauds/irregularities taking  place  in digital marketing  and  banking  sectors.  However,  an  expert  group  was  constituted  by Ministry of Home Affairs (MHA) in 2014 to study the gaps and challenges, prepare a  roadmap  for  effectively  tackling  cybercrimes  in  the  country,  and  give  suitable recommendations on all facets of cybercrime. As per specific recommendations of the  expert  group,  the  Indian  Cyber  Crime  Coordination  Centre  (I4C)  was established to provide a framework and ecosystem for law enforcement agencies (LEAs) to deal with the cybercrimes in a comprehensive and coordinated manner. The  I4C  through  its  different  components,  provides, inter  alia, a  platform  for analysing  all  aspects  of  cybercrimes,  coordinated  action  against  key  cybercrime threats and targets, and facilitate reporting of all types of cybercrime incidents such as  banking  frauds,  unauthorised  card  transactions,  online  transactions  etc.  In addition, a tollfree number '1930' has also been operationalised for lodging online cyber complaints, including in respect of frauds pertaining to banking transactions. Also,  an  online  searchable  database  of  frauds  reported by banks,  in  the form of Central Fraud Registry and a dedicated database for reporting of payment frauds in the form of Central Payments Fraud Information Registry, has been set up by RBI for  control  and  mitigation  of  frauds/irregularities  in  the  banking  sector. It  has compiled various incidents of frauds reported and complaints received, including, inter alia, frauds perpetrated through digital channels and issued communications to members of public to increase awareness about frauds/irregularities taking place in the banking sector, including through digital channels.

Comprehensive steps taken in order to strengthen security of digital transactions and to stop cyber-frauds including, inter alia , the following -

- (i) RBI  has  issued  a  comprehensive  circular  in  June'  2016  on  Cyber Security Framework in Banks. As per this circular, banks were advised to put in place a board-approved  cybersecurity  policy  elucidating  the  strategy  containing  an appropriate approach to combat cyber threats given the level of complexity of business and acceptable levels of risk.
- (ii) RBI  has  issued  Master  Direction  on  Digital  Payment  Security  Controls  on 18.2.2021.  As  per  this  direction,  banks  have  been  advised  to  put  in  place necessary controls to protect the confidentiality and integrity of customer data, and processes associated with the digital product/services offered by them.
- (iii) The  Indian  Computer  Emergency  Response  Team  (CERT-IN)  under  the Ministry of Electronics and Information Technology issues alerts and advisories regarding latest cyber threats and countermeasures on regular basis to  ensure  safe  usage  of  digital  technologies,  and  is  working  in  coordination with  service  providers,  regulators  and  LEAs  to  track  and  disable  phishing websites and facilitate investigation of fraudulent activities.
- (iv) A toll-free number has also been operationalised to get assistance in lodging online complaints regarding cybercrimes.

Further, RBI has already put in place Master Directions on frauds -classification and reporting by commercial banks and select financial institutions, to provide a framework to  banks  enabling  them  to  detect  and  report  frauds  early  and  taking timely  consequent  actions  like  reporting  to  the  Investigative  agencies  so  that fraudsters  are  brought  to  book  early,  examining  staff  accountability  and  do effective  fraud  risk  management.  It  also  aims  to  enable  faster  dissemination  of information from RBI to banks to enable them to introduce necessary safeguards/ preventive  measures  by  way  of  appropriate  procedures  and  internal  checks  to check the frauds/irregularities taking place in the banking sector.

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