a thorough plan of action with clearly identified roles and responsibilities in the event of cyber incidents is a must in today ’ s environment. 10. the old adage, prevention is better than cure applies to cyber security as well. banks need to have a robust defence mechanism against cyber incidents at all times. however, our observation is that many a times, certain finer details such as configuration of devices, patch management, oem supported software, password management or port management, are ignored or entirely left to the vendors resulting in an undesirable impact. statistics suggest that it takes on an average about 6 months to detect cyber - attacks by outsiders and longer in cases where attacks 2 / 5 bis central bankers'speeches are by insiders. thus, early detection and response assumes significant importance. banks need to build capabilities to detect cyber - attacks early and respond to them quickly. recovery from the incident is another aspect that needs to be well thought out. 11. the world has learnt that in dealing with cyber - attacks, awareness and sharing of information plays an important role. knowledge on cyber related aspects is relevant for all the stakeholders including the board members. we often observe that this key premise is ignored. 12. rbi has mandated that all unusual cyber - incidents have to be reported within 2 to 6 hours invariably. we observe that banks take much longer time in reporting the incident. once reported, the results of root cause analysis as well as findings of forensic audit also need to be shared promptly. you would appreciate that timely reporting of cyber incidents is very crucial to enable issuance of suitable cautionary advisories to other banks. 13. in a nutshell, all stakeholders must work collectively to guard and fight against the menace of cyber threat. to quote our prime minister, “ i dream of a digital india where : cyber security becomes an integral part of our national security1 ” yes, when such message comes from the highest authority in the country, we need no further stimulus for action. i am sure that this program will leave you with many takeaways and enable you to be a change agent within your respective institutions for securing the it infrastructure as well as for educating the customers on how to avoid becoming a victim of fraud. 14. before i move beyond the cyberspace and talk about other frauds, let me mention three issues related to cyber security that i wish the participants to deliberate upon during the course of the seminar and one issue for the policy makers to ponder over. a. the rate at which technology

almost all the cases, we observed that the exposure had got seasoned as an npa for 3 to 4 years before the borrower was declared as fraudulent. as a consequence, the gap between the date of occurrence and detection has been widening. further, the gap between first bank and the last bank reporting the borrowal account as fraud to rbi is also very long. what is the concern here? as you know ‘ fraud ’ is a criminal offence and any delay on the part of the bankers in initially red flagging an exposure and subsequently declaring it as a fraud will have far reaching implications on the employee conduct and internal governance standard. banks and bankers could be charged for abetting the criminal offence. my call to you therefore, is to identify and declare the account as fraud without wasting time. the best course of action would be to follow the instructions in letter and spirit and take a responsible and pro - active stand while attending consortium meetings. 17. as a penal measure borrowers who have committed a fraud in the account are debarred from availing bank finance from banks / fis / nbfcs etc., for a period of five years from the date of full payment of the defrauded amount. after this period, it is for individual institutions to take a call on whether to lend to such a borrower. anecdotal evidence and our transaction testing on the ground has suggested that this instruction is not always being followed. recently, we had come across a case where a bank had extended a ‘ hand holding operation ’ facility in case of very large fraud account. 18. frauds in the area of cheque cloning continue to be one of the areas of concern for us. we have come across cases where though the original cheques remained in the custody of the customer, cheques with the same series were presented and encashed by fraudsters. rbi has issued guidelines in the issue to the banks in november 2014 and it is necessary that the instructions are followed to prevent fraudulent practices. people risk 19. in most of the psu banks the demographic profile of the employees is very unfavourable and massive recruitment is happening across the banks at the entry level. while banks are augmenting the hr stock, most of them do not have the capacity to train, build and absorb them. in the process the banks are adding significant people risk. 20. another form in which people risk can manifest is on account of gap in understanding of technology between two sets of employees,