Header image alt text


Building a Responsible Cyber Society…Since 1998

As India is taking more and more digital initiatives in E Commerce, E Banking and now the Digital Payment mechanisms, there is an increasing fear that Cyber Crimes will continue to grow. In the recent times, Cyber Crimes are also being used as a tool of Terrorism and Wars and unless we are efficient in managing Cyber Crime, it would be difficult to tackle the menace of Cyber Terrorism and Cyber Wars.

Naavi.org has been frequently raising the issue of a need to improve our Cyber Policing system to ensure that Cyber Criminals are caught and punished. Naavi is also personally involved in training of Cyber Crime police since 2000 when the laws first came into existence in India.

At one level we feel that there is a need to “Increase awareness” and “Build Cyber Crime investigation Skills” in the Police and this will improve the situation. If the recommendations of the  T K Vishwanathan Committee report (as leaked) is implemented, ITA 2000/8 will be amended to make it possible for Sub Inspectors to investigate Cyber Crimes. This would mean that a lot more Police Stations will be involved in the Cyber Crime investigations in the coming days and more and more people need to be trained.

However, Naavi has also pointed out that the emphasis of Cyber Crime Management cannot end with creating “Awareness” and conducting training programs whether under the banner of Police Academies, Law Colleges or DSCI. Though we can show statistics of such outreach programs indicating that there are thousands of police officers with a good awareness of Cyber Crimes, the number of successful investigations and Prosecutions is still very low. Many of the prosecutions have been sustained because the cases were pursued along with some IPC sections and had they been pursued only under ITA 2000/8, the cases would have failed. Judiciary has not been kind to Cyber Police with the scrapping of Section 66A.

The Cyber Crime victims therefore have been left completely unsatisfied about getting their grievances redressed through legal means. With the Adjudication system unable to take off and Cyber Appellate Tribunal being in eternal closure mode, the Civil proceedings are also not moving smoothly. For every dispute there is now a need to move the High Court and this is not feasible for most of the crimes.

If therefore a survey is conducted with Cyber Crime Victims, they would unanimously conclude that there is no effective Cyber Crime Police in India.

Recently, I had approached Mumbai Cyber Crime Cell for a simple e-mail based crime and the Police have been taking ages to respond. The possibility of the Police being unable to conclude the investigation in this case is therefore very high.

As I have indicated in my earlier article the efficiency of the Cyber Crime Police seems to have deteriorated in the current times compared to the days the undersigned entered the Cyber Crime investigation because the intermediaries like Google, Yahoo and ISPs seem to  value the rights of Criminals or Suspected Criminals in hiding their IDs which puts several hurdles before the Police can come anywhere near them. All the training and awareness workshops have yielded very little benefit to the common man.

If this situation is not brought under control, we will have a chaotic situation that will prevail in the country.

We as a society have to therefore  initiate some concrete steps to arrest the deteriorating situation and ensure that our Cyber Crime Police become more efficient.

In this direction, we have discussed many suggestions in the past. But it is now time to gather more scientific information from the market on What is causing problems delaying Cyber Crime Investigations and frustrating Cyber Crime prosecutions.

It has therefore been felt that we need to conduct an all India survey to gather a reliable information through a survey and involving as many stake holders as possible.

Target Audience 

Public are  the final stake holders and we need to gather their views to understand what they feel about the problem.

But another important part of the target audience is  informed professionals in the Cyber Crime investigation and prosecution and the Police themselves.

Many solutions have to come from within the Police.

The suggestion of the TK Vishwanathan Committee leaked report seems to have indicated that some amendments to CrPC would help and there could be more that can be attempted if there is need.

Scope of Survey

The Cyber Crime Management has a wide scope which includes

a) Prevention of Cyber Crimes

b) Reporting of Cyber Crimes

c) Detection of Cyber Crimes

d) Identification of offences as per law

e) Primary identification of the device responsible for the offence including the IP address, Mobile Number etc

f) Identification of the individual behind the device identification

g) Collecting evidence in a proper form admissible in a Court

h) Cooperation with inter state and inter national agencies

i) Improving the Legal system for Criminal complaints

j) Improving the Legal system for Civil Claims which includes the Adjudication and Cyber Appellate tribunals

k) Encouraging Alternate Dispute Resolution Mechanisms to aid and assist the formal judicial system

l) Role of Cyber Crime Insurance in mitigating the losses of the public

m) Role of RBI, the Banking Ombudsman, the Zero Liability circular of RBI, the CERT IN etc

When I floated the thought of conducting a survey to “Improve the Cyber Crime Investigations in India” in some of the professional groups, the response was overwhelming. Many have come forward to share their thoughts and participate in conducting the survey.

After further discussions, we will finalize how the survey would be conducted.

We can even handle the requirement in stages with small achievable targets to be taken in the beginning.

The first task I would like to focus is “Improvements in the Cyber Crime Investigation System” . This may include how we identify and record potential crimes quickly and how quickly we can bring the investigation of identifying the suspect within the “Golden hour” of crime. This should be followed by identification of evidence required to be collected and collecting them properly without adversely affecting their validity in a Court of Law.

The expertise and equipment required upto this stage is minimal and it is not difficult to equip every Police Station to have this capability within a short time.

After this stage the Case will take a turn either into a Civil proceeding or continue as a Criminal proceeding even while the victim pursues civil remedies. Some cases get closed at this stage itself.

If we are able to improve the “Time To Identifying the Suspect” then there will be a high level of public satisfaction.

Further delays may still happen in the Judicial Process where the need for ADR (Check out the concept of  Cyber Dispute Mediation and Arbitration Center or CDMAC) becomes relevant.

Beyond this, there will still be issues such as higher level of Forensic capability and international cooperation through treaties. These are issues that need to be tackled later.

If Awareness is the major issue, it should be handled on a war footing. If there are other issues, we need to address them involving appropriate agencies. If the issue is non cooperation of intermediaries like Google and Facebook, it may have to be tackled with the involvement of the MeiTy.

These and other related issues would be part of the survey when a questionnaire has to be designed.

I have placed some of my initial thoughts here so that we can together develop a scope document which is not too broad and unmanageable.

I invite responses from all concerned persons either through comments here or through email.



Print Friendly, PDF & Email

Information Security Headache for PPI Issuers

Posted by Vijayashankar Na on October 21, 2017
Posted in Cyber Law  | No Comments yet, please leave one

The Payment Instruments industry which consists of many of the mobile wallet operators have raised objection to the recent Master Guidelines issue by RBI on several counts such as

a) KYC requirement made more or less mandatory for all Semi Closed and Open system PPIs

b) Phased introduction of interoperability

c) Restriction of peer to peer fund transfer in Semi KYC wallets

Out of these, KYC requirements are essential to prevent frauds and is non negotiable. Funds transfer for KYC done PPIs provide for transfer “Back to Source” and “Own Bank Account” and hence should not be an issue beyond that it is a little inconvenient for customers.

Transfer from one PPI to another actually creates a problem in understanding the usage pattern and creates double counting for statistical purposes. If both accounts are KYC enabled, RBI can consider relaxing this provision and managing its statistical problems by tweaking its system.

Interoperability is a technology issue and would perhaps introduce some costs. It may require a discussion at technical levels but it is desirable in the long run.

I presume that more than the above publicly expressed grievances of the PCI, (Payment Council of India) what has made them squirm is the reiteration of

a) Security and Fraud Prevention Management Framework

b) Customer Protection and Grievance Redressal Framework

c) Information System Audit

in the Master Directions.

Let’s now look deeper into these provisions as contained in the Master Directions.

a) Security and Fraud Prevention Management Framework

The Security measures envisaged in the guidelines include development of a “Board Approved Information Security Policy” which should be the starting point. The security measures need to be reviewed on an ongoing basis but atleast once a year, after any security incident or breach and before/after a major change to their infrastructure or procedures.

Apart from the usual security measures such as monitoring invalid log in attempts, time out, beneficiary creation alerts, cooling period etc the guideline requires that

“Issuers shall introduce a system where every successive payment transactions in wallet is authenticated by explicit customer consent”

Presently the OTP is used more as a pre-transaction second factor authentication. Will this double up as “Explicit Customer Consent”? needs to be discussed.

“Cards (physical or virtual) shall necessarily have Additional Factor of Authentication (AFA) as required for debit cards, except in case of PPIs issued under PPI-MTS.”

Some PPIs at present donot have second factor authentication at the time of usage transaction though they may have authentication at the time of loading. This may require some modification of the system.

” Issuers shall provide customer induced options for fixing a cap on number of transactions and transaction value for different types of transactions / beneficiaries. Customers shall be allowed to change the caps, with additional authentication and validation.”

This is an important requirement that was first suggested by the Damodaran Committee on Customer relations way back in 2011 and has not been fully implemented. This is an important risk control measure and should be welcome. However it requires some support since hackers can easily modify it once they have access to the system.

“Issuers shall put in place a mechanism to send alerts when transactions are done using the PPIs. In addition to the debit or credit amount intimation, the alert shall also indicate the balance available / remaining in the PPI after completion of the said transaction”

This “Alert” is also a requirement under the “Zero Liability Circular of July 6, 2017. Some PPI issuers have not incorporated the “Balance” aspect and need to incorporate it now.

“Issuers shall put in place mechanism for velocity check on the number of transactions effected in a PPI per day / per beneficiary.”

This is an important aspect of “Adaptive Authentication” which many have ignored. It however requires a proper system for identifying a risk and responding to it appropriately.

“Issuers shall also put in place suitable mechanism to prevent, detect and restrict occurrence of fraudulent transactions including loading / reloading funds into the PPI.”

This is an open ended requirement that requires a proper risk assessment including threats and vulnerabilities in the environment. Adequacy of this should be seen through the IS policy.

” Issuers shall put in place suitable internal and external escalation mechanisms in case of suspicious operations, besides alerting the customer in case of such transactions.”

This needs to be addressed through the Grievance Redressal Mechanism which was also part of the Section 79-ITA 2008 requirement which many of these PPI issuers did not recognize and implement. Now they cannot ignore the requirement.

” PPI issuers shall establish a mechanism for monitoring, handling and follow-up of cyber security incidents and cyber security breaches. The same shall be reported immediately to DPSS, RBI, Central Office, Mumbai. It shall also be reported to CERT-IN as per the details notified by CERT-IN.”

This is the most annoying requirement as far as the PPI issuers are concerned. But this is the only control that will ensure that PPI issuers take the directions seriously. It will also retain the hold of CERT-IN on the PPI issuers as envisaged in the ITA 2008.

b) Customer Protection and Grievance Redressal Framework

The guidelines are supported by a stringent Customer protection and Grievance Redressal Framework.

The framework includes “Disclosure” of important terms and conditions, creating awareness on secure use of PPIs and conform to the RBI’s “Zero Liability Circular”

It is interesting to note that the directions indicate that “In case of PPIs issued by banks, customers shall have recourse to the Banking Ombudsman Scheme for grievance redressal.”

Otherwise the grievance redessal framework needs to include:

a formal, publicly disclosed customer grievance redressal framework, including designating a nodal officer to handle the customer complaints / grievances, the escalation matrix and turn-around-times for complaint resolution. The complaint facility, if made available on website / mobile, shall be clearly and easily accessible. The framework shall include, at the minimum, the following:

a) PPI issuers shall disseminate the information of their customer protection and grievance redressal policy in simple language (preferably in English, Hindi and the local language).
b) PPI issuers shall clearly indicate the customer care contact details, including details of nodal officials for grievance redressal (telephone numbers, email address, postal address, etc.) on website, mobile wallet apps, and cards.
c) PPI agents shall display proper signage of the PPI Issuer and the customer care contact details as at (b) above.
d) PPI issuers shall provide specific complaint numbers for the complaints lodged along with the facility to track the status of the complaint by the customer.
e) PPI issuers shall initiate action to resolve any customer complaint / grievance expeditiously, preferably within 48 hours and resolve the same not later than 30 days from  the date of receipt of such complaint / grievance.
f) PPI Issuers shall display the detailed list of their authorized / designated agents (name, agent ID, address, contact details, etc.) on the website / mobile app.

These are areas in which lot of action is still required for many Mobile wallet operators.

c) Information System Audit

The Master directions has also included a detailed guideline on the Information Security Audit requirements for the PPI issuers.

The directions make reference to the “Cyber Security Framework”  which is a comprehensive guideline which even the best of Banks are struggling to meet. PPI issuers who are banking on Mobile Apps will find meeting these guidelines challenging.

The Audits need to be conducted by CERT-IN empanelled auditors within two months of the cose of their financial year and submit reports to RBI.

In particular, the master directions indicate that

All PPI issuers shall, at the minimum, put in place following framework:

a) Application Life Cycle Security: The source code audits shall be conducted by professionally competent personnel / service providers or have assurance from application providers / OEMs that the application is free from embedded malicious / fraudulent code.

b) Security Operations Centre (SOC): Integration of system level (server), application level logs of mobile applications (PPIs) with SOC for centralised and co-ordinated monitoring and management of security related incidents.

c) Anti-Phishing: PPI issuers shall subscribe to anti-phishing / anti-rouge app services from external service providers for identifying and taking down phishing websites / rouge applications in the wake of increase of rogue mobile apps / phishing attacks.

d) Risk-based Transaction Monitoring: Risk-based transaction monitoring or surveillance process shall be implemented as part of fraud risk management system.

e) Vendor Risk Management:

(i) PPI issuer shall enter into an agreement with the service provider that amongst others provides for right of audit / inspection by the regulators of the country;

(ii) RBI shall have access to all information resources (online / in person) that are consumed by PPI provider, to be made accessible to RBI officials when sought, though the infrastructure / enabling resources may not physically be located in the premises of PPI provider;

(iii) PPI issuers shall adhere to the relevant legal and regulatory requirements relating to geographical location of infrastructure and movement of data out of borders;

(iv) PPI issuer shall review the security processes and controls being followed by service providers regularly;

(v) Service agreements of PPI issuers with provider shall include a security clause on disclosing the security breaches if any happening specific to issuer’s ICT infrastructure or process including not limited to software, application and data as part of Security incident Management standards, etc.

f) Disaster Recovery: PPI issuer shall consider having DR facility to achieve the Recovery Time Objective (RTO) / Recovery Point Objective (RPO) for the PPI system to recover rapidly from cyber-attacks / other incidents and safely resume critical operations aligned with RTO while ensuring security of processes and data is protected.

Obviously these are the matters that non Banking PPI issuers may not be prepared. It will also involve expenditure and management attention.

I suppose that these are the issues that is making PCI uncomfortable.

However, we welcome the stringent regulations which are in the interest of the general public. If only they had specified a mandatory Cyber Insurance aspect, it would have been even better.

Anyway let us now watch and observe how these guidelines are implemented by the industry and how RBI will enforce them.

Interesting days are ahead for Cyber Security professionals.


Earlier Articles:

New RBI Norms for Prepaid Instruments make Digital payment Companies squirm

The PPI Ecosystem and the Power of the industry to lobby

Understanding the types of Prepaid Instruments under Payment and Settlements Act

Print Friendly, PDF & Email

Under the Master Directions for PPIs (MD-PPI), three types of PPIs are recognized namely

a) Closed System PPIs
b) Semi-Closed System PPIs
c) Open System PPIs

Closed System PPIs are those PPIs  which are issued by an entity for facilitating the purchase of goods and services from that entity only and do not permit cash withdrawal. As these instruments cannot be used for payments or settlement for third party services, the issuance and operation of such instruments is not classified as payment systems requiring approval / authorisation by the RBI.

Semi-closed System PPIs  are those  PPIs  which are used for purchase of goods and services, including financial services, remittance facilities, etc., at a group of clearly identified merchant locations / establishments which have a specific contract with the issuer (or contract through a payment aggregator / payment gateway) to accept the PPIs as payment instruments. These instruments do not permit cash withdrawal, irrespective of whether they are issued by banks or non-banks,

Open System PPIs are those PPIs  which are issued only by banks and are used at any merchant for purchase of goods and services, including financial services, remittance facilities, etc. Banks issuing such PPIs shall also facilitate cash withdrawal at ATMs / Point of Sale (PoS) / Business Correspondents (BCs).

PPIs may be “Reloadable” or “Non Reloadable”. Some PPIs may permit “Cross Border outward Transactions” and some may not. PPIs may also be issued  against inward remittance to the beneficiaries under Money Transfer Service Scheme of RBI. Some PPIs may be denominated in Foreign Exchange also.

PPIs may be issued as cards, wallets, and any such form / instrument which can be used to access the PPI and to use the amount therein.

PPIs may be issued under Co-Branding arrangements. If one of the Co Branding partners is a Bank and the other is a Non Bank, the Bank will be the PPI Issuer. If both are non Bank institutions, or both are Banks, then one of them shall be designated as the PPI issuer.

Paper based prepaid meal instruments shall be discontinued from December 31, 2017 and semi closed PPIs shall be issued for such purpose.

The Regulations

Most of the regulations in the Master Directions relate to Semi Closed PPIs.

According to the guidelines, PPIs upto a monthly usage limit of Rs 10000/- can be issued on the basis of self declaration of name and an ID along with OTP on a mobile. Essentially these are non_KYC compliant instruments.

Funds in these non KYC PPIs can be used only for purchase of goods and services and money cannot be transferred back either to Bank accounts or to other PPIs.

These PPIs need to be compulsorily converted into KYC type within 1 year. If KYC is not provided, no further credit would be allowed but the balance can be used.

If the PPI is closed at the request of the user, money can be transferred back to the own bank account of the PPI holder for which KYC would be required or “Back to Source”. (P.S: Not clear if KYC is not required for Back to Source transfer on closure).

The PPI issuers need to ensure that same category PPI is not issued against the same mobile number. (P.S: There is an ambiguity whether a second non KYC PPI can be issued against the same mobile number if the name and ID is different. Ideally this should not be allowed).

PPIs for transaction upto Rs 1 lakh are KYC compliant PPIs. Money can be transferred to own bank account or Back to source.

“Pre registered beneficiaries” can be allowed for these KYC PPIs and money can be transferred to them upto the limit of Rs 1 lakh per month.

Fund transfer limits in the case of non pre-registered beneficiaries is limited to Rs 10,000/- per month.

Open Systems

The “Open” systems are permitted only to be issued by Banks and with KYC. Here also there can be pre-registered beneficiaries and others and transfer to others is restricted to Rs 10000/- per month.

The only difference between the Pre-closed and open systems is that Funds transfer for Open PPIs shall also be permitted to other open system PPIs, debit cards and credit cards as per the limits such as Rs 10,000/- except to pre-registered beneficiaries.

Gift and MTS PPIs

Other than the above three main categories of PPIs, specific PPIs such as Gift Instruments (Maximum value Rs 10,000/- without cash-out or refund or reloading).

But KYC would be required on a risk based approach if multiple Gift cards are required to be issued to one person. (P.S: This is tricky and needs some policy guidelines to be formulated by the PPI issuer)

PPIs can also be issued for Mass Transit Systems which may be Semi Closed PPIs usable only for the transit systems and allied merchants. They are re loadable with a maximum outstanding or Rs 3000/- at any point of time.

Conversion of Existing PPIs

According to the directions, PPI issuers shall give an option to all PPI holders to convert the existing semi-closed and open system PPIs issued to them  into any type of the PPIs as indicated in the directions.

After carrying out the applicable due diligence for that type of PPI, this conversion shall be completed on or before December 31, 2017 . Where PPI holders have not exercised the option  the PPIs issued to them shall mandatorily be converted into minimum detail PPIs  on January 01, 2018 with all the applicable features.

Looking at the regulations above, except for mandatory KYC after 1 year for all Semi Closed PPIs there is no major change from the current system.

Fraud control is through limiting of the fund transfer limit to the non pre-registered beneficiaries to Rs 10,000/-. Restriction of transfer and withdrawal by cash is essential for controlling the Black Money and hence, there should be nothing much for the PCI to object on the KYC aspect.

The argument that frauds happen at the loading time at the Card end and not at the Wallet/PPI end is not tenable since both need to share the responsibility and liability since fraud is facilitated because the Wallets/PPIs have no KYC and it escapes detection of the end user of fraudulent transfer from a Card. We need to take all steps to prevent frauds and losses and it is unfair that all the liabilities are to be boarne only by the Card issuers.

In view of the “Zero Liability” aspect, Banks need to bear the cost of frauds and there is a need for the PPI issuers in the private sector to also take precautions by proper KYC so that the losses can be recovered and possibilities of fraudsters repeating their fraud with different PPI issuers and multiple non KYC PPIs is prevented.

It is necessary for RBI to insist that both the Banks and the PPI issuers obtain necessary Fraud insurance so that their risks are covered and customers are not put into difficulty.

(To Be continued)


Print Friendly, PDF & Email

The Prepaid Instrument Eco System in India under the Payment and Settlements Act 2007 has licensed several “Payment System Operators” under the Act. The list of such operators is available here.

The list consists of

  1. Two Financial Market Infrastructure operators namely the Clearing Corporation of India Limited and the National Payments Corporation of India (NPCI),
  2. 5 Card payment networks including the Amex, Diners, VISA, Master, etc
  3. 9 inbound Cross border Money Transfer Systems including Western Union etc
  4. 6 ATM Networks
  5. 55 Prepaid Instruments
  6. 9 White Lablel ATM Operators
  7. One Instant Money Stransfer system of Empays Payment Systems
  8. Three Trade REceiviables Discounting Systems
  9. Eight Bharat Bill Payment Operating Units

The entities who have been “Payment Bank” licenses such as Airtel Payment Bank Ltd, India Post Payments Bank Ltd, Paytm Payments bank Ltd, and Fino Payments bank Ltd are other entities in the Digital payment domain.

Licensed Scheduled Banks are also in the digital payment system with their UPIs, Wallets, Virtual and Physical Prepaid Cards, Debit Cards, Credit Cards etc. (Refer article in livemint). It appears that out of the eleven provisional licenses issued for Payment Banks, others have not yet operationalized their licenses.

The October 11, 2017 master directions of RBI apply to the 55 Prepaid Instrument operators which includes Aircel, Amazon Pay, Mannapuram, Muthoot, Mobikwick, Oxigen,PhonePe, Jio money, Sodexo, m-Pesa,etc.

On March 9, 2017, the Ministry of Information Technology had issued certain draft guidelines constituting “Reasonable Security Practices” applicable to the e-PPI instrument issuers. It was called  “Information Technology (Security of Prepaid Payment instruments Rules 2017-Draft.

At that time, some of the operators had raised objection on the rules and its requirement to interact with CERT IN to report security breaches etc.

Unfortunately, the Ministry succumbed to the industry lobby and there was no follow up on the draft guideline which was well within the powers of the Ministry.

The e-PPI operators are “Intermediaries” under ITA 2008 and they always had the obligation for “Reasonable Security Practice” whether they were defined by a rule or not.

Hence there was no reason for the Ministry to buckle under pressure except for the reason that the responsibility to issue the guideline could be delegated to RBI.

Now the Master Direction of RBI of October 11, 2017 is a follow up of this and represent among others the “Reasonable Security Practice” to be followed by these e-PPI operators.

The objection raised by the PCI is therefore yet another attempt to influence the policies in their favour. Hopefully RBI is made of tougher material and commitment to the security of the financial system rather than the Ministry of Information Technology and we can hope that it withstands the pressures from the industry.

We need to however watch the developments to see if the industry lobby is able to get any dilutions that may adversely affect the Consumer interests.

We have noted that in the past, the industry is only interested in “Exploitation” of the citizens and technologists are unmindful of the fraud possibilities in the new Digital payment eco system.

The Government appears to be only interested in only raising the “Revenue” by taxing the public for the digital transactions and levying “Cess” for security and is not genuinely concerned about the security of the public. We have seen this in the Bitcoin scenario where the Finance Ministry has been sympathetic to the criminal elements endorsing Bitcoin legalization rather than taking a quick decision to ban it. It is therefore not surprising that the MeiTy quietly withdrew the security rule notification.

It is only RBI which from time to time shows a commitment to securing the financial eco system though they are often over powered by the Banking industry lobby such as IBA.

Hopefully the PCI is not as powerful as IBA and hence it may not be easy to make RBI change its stance on the Master directions. But in the past we have observed that RBI has without diluting its stringent guidelines, turned a blind eye to contraventions and be good to the industry while also appearing to take care of the public interest.

I hope in this instance RBI will remain firm and impose the security directions in the interest of the public.

(More about the security requirements under the directions would be discussed in the continuation article)



Print Friendly, PDF & Email

On 11th October 2017, RBI came out with a comprehensive “Master Direction” applicable to all Prepaid Payment Instrument Issuers, System Providers and System participants. This was mainly a consolidation of all earlier guidelines. However, it appears that some of the participants have already felt the need to approach RBI for diluting the norms.

See Article in Economic Times

The Payment Council of India, (PCI) an industry organization has represented that “Some of the new norms could severely cripple the industry and make the wallet business unviable,”

It is reported that among the major points of concern, according to industry members, are the demand for a mandatory full KYC or know your-customer certification, phased introduction of interoperability and restriction of peer-to-peer fund transfer in semi-KYC wallets.

The objection has been raised on the point “Another major hurdle for payment companies is prohibition of inter-wallet transactions, along with transfer of funds from bank account to wallet from semi-KYC accounts, which the companies believe will destroy the relevance of mobile wallets.”

According to the spokesperson, “The scope of fraud is more in moving money through debit or credit cards into wallets and then siphoning it off to other bank accounts. P2P fund movement is not risky that way. We had made multiple representations to the RBI on this,”

They feel that “doing a full-KYC to open a digital wallet every time will be a major hindrance for smooth business”.

The PCI representatives are likely to meet RBI officials and lobby for dilution of the norms.

In the light of the above, we need to take a comprehensive analysis of the objections raised by PCI vis-a-vis the guidelines and the risks faced by the public and whether there is actually scope for further hardening of the security measures.

We shall analyze the Master directions and the objections raised in the articles to follow.



Print Friendly, PDF & Email

What can be done to improve the number of successful investigations of Cyber Crimes in India? is a question most observers of the Cyber Crime scene in India are struggling to find answer to.

The T K Vishwanathan Committee has recently seems to have suggested three improvements namely

a) Creation of a post of State Cyber Crime Coordinator at the level of the Inspector General of Police (Suggested new Section 25B of CrPc)

b) Providing powers to the Sub Inspectors of Police to investigate offences under ITA 2000/8 (Suggested amendment to Section 78 of ITA 2000)

c) Creating “District Cyber Crime Cell”consisting of a DySP as the head with as many Sub Inspectors as may be required and at least three experts in Information Technology, Mobile Telephony, Digital Forensics, Cyber Law or such other Experts with such qualifications to be appointed by the State Government in accordance with the rules.

(P.S: These are presently recommendations and are yet to be confirmed)

Once these suggestions come into practice, there could be a great improvement in the way Cyber Crime investigations progress.

However, it is necessary for us to flag one of the major stumbling blocks to the speedy investigation of Cyber Crime Cases and that is the non cooperation of intermediaries such as Google, Yahoo, WhatsApp, Face Book, Twitter etc followed by the local ISPs such as the Airtel, Reliance or others.

I recall the early days of Cyber Crime investigations that I was personally involved in Chennai

a) A case in which I located an IP address of a suspect and within the next 20 minutes, I and the DySP converged on to the ISP’s office and got the address of the dynamic IP address user from the RAS server almost instantly and landed up in the scene of crime in the next 10 minutes to find the perpetrator still in front of the computer. The person could be apprehended and investigation could go ahead. In this case the IP address was related to the e-mail recipient. (I suppose it was a Yahoo email).

b) Another case in which a threatening e-mail had been received by a Government official and was reported around 4.00 pm on a particular day and within a few hours it had been resolved to an office address and next day before the office was to open, Police were ready at the site to arrest the employee responsible for the offence and continue the investigation

c) The third was the historical Suhas Katti Case in which again the undersigned started with a Yahoo group message which provided an IP address and resolved it to MTNL Mumbai. Then the Police got the resolution of the MTNL IP address within perhaps a day and were ready to travel to Mumbai for further investigation. With all the formalities for travel and travelling by train, the Police were in Mumbai for further investigation on the 7th day after the complaint had been received to continue with the arrest of the accused and further investigation which finally resulted in the first conviction under ITA 2000.

All the above three incidents happened before 2004 when the Police were still very much ill equipped as to the Forensic part of investigation even at the State Forensic Labs. But they represented very successful investigations.

In comparison, after more than 12 years since these investigations, today, except in the case of celebrity complaints or when national security issues are involved, the first step of getting IP resolution of emails from the service providers such as Gmail takes a much longer time.

The local ISPs are better but even they take their share of time to reveal what is instantly available on their records.

As a result of this loss of action during the golden hour of a Cyber Crime, investigation trails go cold and become unsuccessful.

A similar problem is seen when Police are trying to investigate use of mobiles through the Tower dump analysis or Call Record details.

I am presently struggling with a case in Mumbai where Police is unable to get the information from Google for more than 10 days and I presume that it is Google which is holding up information for no specific reason.

If Cyber Crime investigation has to improve in India therefore, there is a need to make these service providers change their attitude towards their role in Cyber Crime prevention.

What is Required to Change

Firstly it is an obnoxious practice that the service providers follow where they hide the “Originating IP Addresses” from the header information and substitute it with a proxy IP address.

Every e-mail contains a “Sender’s Address” (consisting of the name and signature line) and hence any genuine e-mail sender is voluntarily giving his identity in the header information and the body of the message.

Hence email senders would not have any objection if their IP address is revealed in the header information. At the same time the E-mail recipients would consider it as their  “Legal Right” to know who has sent them the e-mail.

On the other hand the Service providers may have a wrong notion of “Privacy” and think that substituting the real originating IP address with a proxy address is “Protection of Privacy”.

I completely disagree with this view and demand that the Honorable Supreme Court clarify this if required.

Only persons who want to send an e-mail or a message so as to deceive the recipient and mislead him/her about the origin of the message would want their IP address to be protected by a proxy address.

This was actually a recognized offence under Section 66A of the ITA 2008, which our  Supreme Court unfortunately decided to scrap under the wrong notion of protecting Freedom of Speech.

“Attempt to deceive” the recipient of a message is itself an “Attempt to commit an offence” in all cases where the recipient has filed a complaint in which the IP address resolution is one of the requirements of investigation.

In view of this, every time Google or other service providers suppress the real IP address, they are “assisting” the suspect in escaping the legal consequences of “attempt to deceive with false recipient ID”. This is a contravention of Section 43/66 of ITA 2000/8.

Under Section 69B and 70B, Government agencies such as the IT Secretary and DG CERT IN have statutory powers to seek the information and if the intermediaries donot cooperate, prosecute them for imprisonment of 1-2 years.

Despite these strong provisions of ITA 2000/8, the Service providers are not responding to requests from the Police which should happen in real time.

I have suggested in an earlier article that Under Section 69B and 70B, the Government can authorize many officers other than the Police also to issue “Demand for IP Address Resolution” so that the burden on the Police would come down.

In the meantime, I would like Google in particular to respond and show cause why their substitution of originating IP address with their own IP address should not be considered as an open support to the criminal activities and why Google Inc should not be made liable for any delay in the resolution of IP address.

I also urge the Ministry of Information Technology to expand the rules of “Due Diligence” under Section 79 of ITA 2000/8 through a notification/clarification to include that

” When it is brought to the knowledge of the intermediary that their proxy IP address is a subject of an investigation of a contravention of ITA 2000/8, they shall  submit the Original IP address to the complainant on production of a reasonable evidence of contravention, within one hour of receipt of the notice, “.

Google should also introduce other measures to respond to complainants as per provisions under Section 79  in real time basis by designating the “Grievance Officer” under ITA 2000/8 and displaying his contact details prominently on their website.

I urge Supreme Court to take Suo moto action to immediately issue a clarification that “Hiding the Originating IP address” in e-mails and other web/Telecom based transactions including the  “Who Is information” is not considered as “Protection of Privacy” and not revealing the same on demand would be considered as a contravention under Indian law as abetment to a suspected offender.

This may not be an issue of interest to celebrity advocates like Prashant Bhushan or Kapil Sibal, who are able to make Supreme Court to take up petitions at the drop of a hat, or from the Government lawyers who want to avoid any confrontation with the Judiciary on a subject with a tag “Privacy”, but it is a matter of public interest in which the CJI himself should move without waiting for an influential “Celebrity Advocate” to approach them.

In the meantime, I request Google to let us know what is the average time they take in providing the IP resolutions when received from the Police and whether they can improve upon their current performance. 




Print Friendly, PDF & Email