Mobile Apps of Banks ..Not audited by RBI?

Today, I received an interesting question posed to me through the Cyber Law Guru mobile APP. The question was posed by one by name “Sisirk” and stated as follows:

Question: As per their RTI reply, RBI hasn’t really given permission to banks for social media banking. It only asked them to use SM to popularize their mobile banking. Some banks already offering services using Twitter or Facebook and RBI not saying a word! I came to know that RBI hasn’t audited the mobile apps being used by banks either!

So privacy and security of data of banking customers can be overlooked by such banks with blessings from RBI? How can we stop this nonsense? Thank you.

The keen observer has taken the trouble of checking with RBI and brought out an important aspect that Social Media Banking has not been specifically approved by RBI. Going by what the person has posted as a result of an RTI query, RBI has only asked Banks to use Social Media for promotion.

However what Banks have done is to use the Twitter and Facebook as their KYC agents and accept the messages posted from those platforms to trigger banking transactions.

Now the execution of USSD codes on mobiles also have access directly to Banking servers to the extent that information can be pulled out of the Banking servers without any meaningful security.

In this context, I really have no answer to the question posed by Mr Sisirk. I agree with him that Banks are greedy after their commercial interests and try to use technology to improve its earnings even if it is at the cost of the customers. RBI is only good for sending out guidelines and does not take any responsibility for its guidelines being followed. It is the IBA which drives RBI rather than the other way round.

If RBI has not made any audit of the mobile apps, it is certainly a matter of concern.

I hope this revelation by Mr Sisirk would open the eyes of RBI and take suitable care at least in future to ensure that common customer’s interests are not sidelined to boost the profits of Banks.

I thank Mr Sisirk for bring out this fact for public knowledge and hope some positive action comes forth from RBI.

I request Mr Sisirk to share the entire RTI query/reply for publication so that we can get a better picture of the issue.

I also request RBI to comment on the revelation of Mr Sisirk.


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Virtual Address of UPI scheme.. A pandora’s box

One of the suggestions under the Unified Payment Interface is that the participating bank would issue a “Virtual Address” to the customer. This will replace the account number. This virtual address would be used by remitters to send payment.

This system appears exactly similar to the domain name system where the IP address was replaced by a human understandable words.  To access this site you therefore used rather than the static IP address of the server with a folder identity. This system has also given rise to the  problem of “Similar” or “Confusingly similar” domain names and conflicting claims. There could be a which is in conflict with or and so on. These give raise to issues related to trademark and fraudulent impersonation.

Now NPCI  is proposing a naavi@icicibank vs naavi@axisbank vs naavi@sbi etc and a definite possibility of not only trademark issues but also genuine wrong credits and fraudulent charges. If a naavi@axisbank initiates a payment pull from a flipkart purchase, all that is needed for a fraudulent charge on naavi@sbi would be an OTP response which can be engineered by a malicious app.

We are therefore in the brink of a new kind of “Bank Name Disputes” and need to start working on this new business opportunity.

For the common man, this would be a new headache to contend with.

Has NPCI thought of this “Identity Risk” and the legal issues arising out of them?

Who cares? Mr Raghuram Rajan has given his clearence and that is enough to hoist the system on the unsuspecting public.


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The Unification of Fraud possibilities through UPI

The Unified Payment System launched by RBI on 12th April 2016 on a platform managed by National Payment Corporation of India (NPCI) poses a huge challenge to the security of public money held in Banks.

As we go forward, the Banking IDs and Mobile Wallet IDs  of individuals will get integrated into a single “Virtual Address” with which a person can push or pull monetary payment from others. At the back end NPCI will maintain a repository similar to the repository of Aadhar in which the mapping of different Banking accounts for a customer is maintained.

Conceptually the idea appears attractive and efficient, and the technology enthusiasts can boast of a break through in “Mobile as a Universal Payment Management Device” and Tax authorities can gloat over a “Cashless Society”.

However the risks in committing the national payment in introducing such a system on an immature technology such as a mobile platform where a large number of devices are supplied from China, known for planting  “Manchurian Chip” into Credit Card swiping equipments and “Planting of People” into companies in India are too huge from the National Security perspective.

It is unfortunate that, the risks of any compromise of security are boarne by the Citizens of India and neither NPCI nor the Banks can be trusted for protecting the consumer.

The various cases which are being fought in the country between Phishing victims and the Banks are a standing example of how common people are losing money every day and the Banks, supported by RBI and IBA flex their legal muscle to browbeat customers into bearing the loss.

The Government of India is also compromised under the influence of the Banking lobbies and the result is that Cyber Appellate Tribunal is not having a Chair person since 2011, consumer oriented Adjudicators such as Rajesh Agarwal of Mumbai and PWC Davidar of Chennai were shunted out from their positions. Adjudicators in Karnataka went a step ahead in twisting law to support the Banks against victims of fraud even taking on the legal department of the State and the Human Rights Commission. Some High Courts such as Karnataka were also unable to provide justice as they were blinded for whatever reason not to see through the games played by Banks to avoid their liabilities.

Our honourable Prime Minister  has also repeatedly ignored the call for mandatory introduction of “Cyber Insurance” to protect the insecure mobile payments and technology innovations in Banking. Poor Rahul Gandhi can only understand the plight of “Farmers” who form a vote bank and not the plight of victims of Bank frauds and hence there is no pressure on the Government to ask Banks why they donot have Cyber Insurance in place to protect consumer interest which was in fact made mandatory through the RBI’s Internet Banking guidelines in June 2011.

The CERT IN which should be concerned and the CCA which is the custodian of digital identity of Indians are part of the Ministry of Information Technology and donot have independent thinking. They support the technology initiatives without trying to fulfill their statutory obligations.

Overall the future of financial security in India appears to be grim.

It is common knowledge that when we travel, we donot keep all our cash in one single pocket because of the threat of the pick pocket. But NPCI thinks that keeping all our financial IDs under one “Virtual Address” is a great idea. Idea may be good but risks are being ignored.

When a mobile is being used as a universal financial ID, we must factor in the possibility of a mobile being stolen or at least compromised through malicious Apps. Has the NPCI considered this possibility where a mobile can be hijacked by a fraudster. If done, then the bank balance of persons across multiple Banks and limits under Credit cards are prone to be stolen. It has now become common practice for Apps to be designed with an ability to read “SMS” and thus the so called OTP sent to a mobile always gets back an automated reply back. How can this be called 2 factor authentication?.. without an affirmative consent from the mobile owner of the OTP? While the law in India wants digital signature, why is Government supporting OTP as a universal technology even to obtain a digital certificate under e-sign system?.. Opening  All this defies logic. Now top it all, we are opening the financial vault of an individual to execution of USSD codes.  I consider this as an unacceptable risk. But as a bank customer, the service and insecure banking has been forced on me.

The only logic that explains all this stupid acts of technologists and bureaucrats is that the global fraud industry is slowly taking over the Indian economy for commercial gains.

What is however more alarming is that one day this will explode as a “Cyber War” or a “Cyber Terror Attack” much before the Pak Nukes fall into the hands of AlQueda.

I hope the deaf bureaucrats in the Government who may actually be more patriotic than me but ignorant of the risks listen to these shouts and protect the National Security interests before getting blown over by presentations by technologists.

The only way out of this for the individual is to de-register mobile from my bank account, get back to cash transactions, use the good old mobile handset which is not smart but can meet my communication requirements… Yes, for the sake of securing ourselves from the insecurity spreading around us, we need to take a few steps back in technology use since we need to survive before we can enjoy life.


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Biggest data breach in Indian Banking ?

If you are an ICICI bank customer, beware that your Bank account information is open to anybody who is in possession of your mobile. This is breach of privacy under the age old Banking laws besides it is a violation of Section 72A and Section 43A of ITA 2000/8 on which the CEO of the Bank can be imprisoned for 3 years and compensation claimed for the loss.

This is because, if anybody takes your mobile (If it is the registered mobile associated with the account) and types *99# in the calling dial pad and hits enter, the USSD code would execute and ask for first four letters of the IFSC code to be entered. When you enter ICIC, you  will be given direct access to the bank account with options to

1) View Balance

2) See mini statement

3) Send Money using MMID

4)Send Money using IFSC

5) Generate MPIN

For viewing the balance and mini statement, there is no password requirement and on entering the code 1 or 2 the relevant information would be displayed on the mobile.

It is unfortunate that this security flaw exists not only in ICICI bank but in a few other Banks as well. Readers can check their mobiles and keep me informed about other Banks.

I hereby give notice to ICICI Bank and RBI as well as CERT IN that the above flaw puts “Sensitive Personal Information” of ICICI Bank customers at risk of Breach of Privacy and consequential further risk of monetary loss.

The incident should be an eye opener to Indian Bankers led by RBI and IBA where they have embraced the mobile technology without understanding the risks associated therewith. This is negligence at the level of the highest banking authorities in India and exposes the systemic inadequacies.

The incident is a potential “Data Breach” and according to Section 79 read with Section 43A, should be reported by Banks to CERT IN. Will CERT IN respond if they take action?

Hope the Finance Minister and the PM takes note.

Whether politicians take note or not, whether the Bankers take note or not, I request public to take note and initiate corrective action. I hope some body files a PIL in a Court and demand answers from the Banks.



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Unified Payment Interface introduced… New Threats unleashed…

The RBI has introduced the Unified Payment Interface that is expected to change the way the current payment systems especially over mobile wallets change…hopefully for the better.

NPCI (National Payment Corporation of India) has released the details of the architecture under which the system would function.

The UPI is expected to make it easy for transfer of money from and to a bank account merely on the basis of a virtual address. It is claimed that one need not disclose the bank account number to receive a payment but instead use a “Virtual Address” provided by the same Bank.

It is not clear in what way this will make security better. Using the Virtual address, e-commerce companies may be able to send a request for payment which in other words mean “Can dig into the Bank account”.

The system is completely dependent on the mobile network and uses the mobile ownership as the sole identity.  It appears that the system poses grave danger to the mobile users using mobiles for banking purpose.

If some body types *99# in a mobile, it spits out the Bank balance.  Money can also be instantly transferred to a known MMID.  This means that if a mobile device is stolen or given out to another person for a while, it can be used to transfer money from his Bank account.

NPCI has given some use cases to explain how useful is the system for a labourer to transfer money to his wife etc. It appears that NPCI is naive to believe that the system would be used only for genuine transactions. In fact, many of the less educated labourers can easily be cheated out of their savings by this dangerous system.

I am now trying to disable *99# accessing by bank balance. Alternatively, I need to de register my mobile from the ICICI Bank and forego the option of mobile banking.

( I observed that *99# did not work on my HDFC and Corporation Bank account but worked on ICICI Bank account)

Presently different Banks were using different e-wallets and the marketing claim is that UPI makes it easy to integrate all e-wallets. But it appears that it enables money to be siphoned off by fraudsters from all e-wallets.

I request RBI to put the system on hold before further damage is done.


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True Caller is abetting Cyber Frauds in India… Is it only a compromise? or Is it Recklessness?

True Caller is a reasonably popular mobile App which many mobile users in India have downloaded and installed. When the user receives a call from another True Caller user, though his name may not be in the contact list of the receiver, the receiver would get a display of the name of the person who is calling. This is meant to help the receiver to know the name of the caller when he is an unknown person outside his contact list.

When a user downloads the App, he gives permission for the App to access his contact list which goes into a global data base from which the service is delivered. In this process, the name of the owner of a mobile number is the name assigned to him by the member who shares the information.

There is no doubt that when this service  was conceptualized by a techie and became a successful venture, every body would have hailed the service as innovative. In fact it may have some positive uses also.

However, unfortunately, Cyber Criminals try to exploit every service on the  Cyber Space to their advantage and find various methods of using any useful and trusted service to commit frauds.

When a fraud is committed with the use of a service, the service provider becomes vicariously liable to third parties as an “Abetter” of crime. To avoid such liabilities, the service provider tries to adopt a “Privacy Policy” and “Terms of Use” to absolve himself of the liabilities through disclosures and consents.

Recently, it was brought to the notice of that a call was received by a user in Bangalore from one of the fraudulent entities operating as “Representatives of a Bank” and calling to threaten that the “Bank account is being deactivated… unless…”.

(Such frauds in the case of SBI Credit Cards are the most prevalent and soon it will become synonymous with the name of SBI. Just as we recognize advance fee frauds as “Nigerian Fraud”, soon we will recognize the Phishing frauds as “SBI Frauds”. I hope Ms Arundati Bhattacharya takes note of the PR implications of such association of a fraud to SBI’s name.)

The receiver has checked the number under the True Caller data base and found that it had been listed as “SBI”. This would be a reasonable confirmation to any ordinary person to believe what the caller says and act as per his instructions leading to a classical phishing fraud. It is easy to get the name of SBI or any other Bank associated with the telephone number of the caller if one or more of the fraud associates save the number as their contact under the Bank’s name and install True Caller.

When such a fraud occurs, the responsibilities of True Caller as a service provider who provides “Caller ID” as a service will come into question. In Indian law, ITA 2000/8 provides guidelines under Section 79 for intermediaries to maintain “Due Diligence” which also includes “Reasonable Security Practice” under Section 43A for sensitive personal information and additional responsibilities under Section 72A.

If this is an unintended compromise of the service, the service provider can defend by initiating corrective action. If he neglects, Court can interpret as intentional recklessness deserving invoking of law.

SBI  is well within the jurisdiction of India and hence has to recognize this potential risk of liability arising out of the operations of these call centers misusing its name. If no action is initiated by them, it would not only be a reason for holding them liable for the crime, but also for not providing adequate provisions in the balance sheet and thereby misrepresenting the financial position of the bank to the share holders constituting a Corporate Governance failure.

The Corporate Governance auditors of SBI are hereby given notice of the potential financial risk going un-reported in the balance sheet. Hope they will ask the right questions before they sign off on the audit.

True Caller declares as subject to jurisdiction of Courts in Stoclkholm, Sweden.

ITA 2000/8 however over rides the jurisdicional limitation under Section 75 to make Crimes committed outside India and by persons who are not citizens of India also come under the jurisdiction of ITA 2000/8.

Though True Caller presents its Privacy Policy and Terms of Use with several disclaimers, they can be considered as inadequate if the service is known to be used for committing frauds and the service provider has not taken sufficient steps to prevent the same.

I therefore urge the Police to initiate action against True Caller and demand if they have adequate measures

a) To prevent a User or a set of users deliberately registering an impersonated name to a number and commit frauds.

b) To initiate a process by which the Company takes knowledge of any misuse of its service and initiate appropriate immediate counter action

This article in public space is considered as a reasonable notice both to True Caller and the Police in India as well as SBI that True Caller service is being used as a tool of Crime in the name of State Bank of India and the Police are aware of this “Abetment to a Cognizable Offence”.

If no action is taken by any of these parties, future victims can invoke “Negligence” on the part of SBI and True Caller and make them liable under Section 79 read with Section 85 of ITA 2000/8 and other sections of ITA 2000/8.

I suppose efficient and dutiful police officers such as Dr Triveni Singh of Noida will issue notice to both SBI and True Caller to show cause why action cannot be initiated against them for abetting these  Phishing frauds.

For those who receive such calls, I recommend that they immediately post their own disclaimers using the service of and Identity theft notice under This is to offset the possibility that a fraudster makes such a call and then in association with an employee of the bank hacks the Bank account even when the receiver has not revealed any information.

It must be appreciated that in such cases where a hacking is committed after a phishing call,  the evidence would stack against the victim since he cannot deny having received a phishing call but has to convince a Judicial authority that he did not reveal his identity parameters which the Bank will assertively claim.


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