1710 Bank Frauds reported by Police..Does RBI have a count?

triveni_singhDr Triveni Singh, the additional Superintendent Lucknow is emerging as a “Super Cyber Crime Cop” of the country having resolved many individual and organized cyber crimes in the areas around Noida and NCR region of Delhi. Dr Tiveni Singh is an exceptionally qualified police official with an MBA and  PhD, as well as certifications of CEH and CHFI. He is one of the few Police officers in India who are both qualified and also have many field accomplishments to their credit. Perhaps it looks strange that he belongs to the UP cadre and not working in Delhi or other major metros leading a National level Cyber Crime Police Force.  Such a specialized police force is necessary for the security of Digital India and hopefully, Mr Triveni Singh will soon be provided an opportunity to use his skills in a more productive posting.

In solving some  of the recent crimes involving  Bank Frauds, Mr Triveni Singh has reported that a special task force studied 210 FIRs and 1500 complaints from the residents of Haryana, Rajasthan, Maharashtra, Punjab and Bihar and came to certain interesting conclusions as the behaviour of these gang members. The total value of the frauds involved in these cases was around Rs 80 lakhs.

The police have found that the fraudsters used the proceeds to buy mobile phones and also kept money in mobile wallets. They were able to use the e-commerce merchants and mobile wallet managers as conduits to commit crimes, exposing them to risks of being held liable for the frauds under ITA 2008. These e commerce and mobile wallet managers are guilty of weak KYC and identity verification systems contributing directly to frauds.

See Report in Times of India

One of the immediate thoughts that occurred to me on reading the report is about the Cyber Crime statistics. The report indicates that in the few states mentioned, there was nearly 1700 cases reported involving  banks. But it is not clear if these cases get reported as “Bank Frauds” in the RBI’s records. In the absence of proper recognition of the incidence of such crimes, RBI is blind to the risks of e-banking and keeps allowing Banks introduce more and more technology in Banking without appropriate safeguards.

While it is exciting to hear about innovative banking practices such as the social media banking, card less banking etc., there is no accountability for Bankers when it comes to frauds. Now RBI has provided licenses to Small Banks and Payment Banks who are more technology dependent and therefore more vulnerable to Cyber Crimes.

With every new step in the advancement of technology in Banking, the customers are being driven into higher and higher risk situations.

Banks continue to evade any liability for frauds and RBI’s ombudsmen  collude with Bankers and refuse relief to Customers in ATM card, Credit Card and Mobile frauds. The supervision of RBI on information security in Banks is inadequate and Banks work with more risks than they can afford.

To top it all, Banks which were mandated to obtain Cyber Insurance against such frauds and ensure that customers donot suffer losses by none other than RBI itself through its Internet Banking Guidelines of June 2001, refuse to take such cover even today after 15 years.

If RBI was serious about customer safety it should have ensured that by this time all Banks had a suitable Cyber Insurance cover and not bully its customers to bear the cyber fraud losses. Without such insurance cover for their customers, no new Bank should have been licensed. But despite representations to this effect, RBI did not take any action and let new Banks be licensed with more risks than existing Banks.

I wish Dr Triveni Singh books a few Bank officials for their negligence in maintaining proper information security in their systems causing losses to the customers. We are aware that under ITA 2008, vicarious liabilities accrue to Bank for their negligence which causes identity theft and unauthorized access.

In fact one of the largest phishing frauds in India occurred in PNB, Noida where a customer lost Rs 1.64 crores. The case is lingering along in the National Consumer Forum and despite atrocious negligence in “Banking Service” displayed by the Bank, justice is being delayed for more than 7 years. Around this time in 2008 a series of frauds occurred in PNB and if Dr Triveni Singh studies all such frauds, it will be clear that PNB had put all its customers to a huge level of risks entirely by their own ineptitude. While the victims of the cyber crimes are suffering for last 7 years, the then Chairman went on to become IBA chairman and enjoy the fruits of his office built over the losses of the customers of PNB. I am not sure if there is any mechanism in RBI to monitor such matters which are simply reported by the Banks as “Under litigation”. RBI should study the impact of such unresolved frauds on the trust and confidence that people have on Banks and the danger of a back lash from customers.

I wish that at least now RBI assumes accountability for safe e-banking and ensure that the future of Digital India is not endangered.



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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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2 Responses to 1710 Bank Frauds reported by Police..Does RBI have a count?

  1. KBHATT says:

    Good article,
    We need more experts in this line like Dr. Singh.
    The banks that overlook cyber security and neglect customers must be strictly dealt with, but sadly we see very very less banks getting punished for ignorance.
    We need more experts in cyber security and cyber crime investigation and its true that we have a huge pool of experts but are overlooked and are rarely given any chance.
    How can our govt talk of ‘digital India’ || ‘smart cities’ with the concept of security light years away???
    actually we need ‘secure digital India’ && ‘secure smart cities’
    if Our govt is trying to establish itself as ‘tech savvy’ then the concepts of security cannot be overlooked…..
    there should be prospects for tech security professionals in the govt. sectors. Without this, a brain drain of talented information security professionals can increase for sure..

  2. Pingback: Rs 197 crores lost by ONGC to a silly Cyber Fraud | Cyber Space

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