Axis Bank has been in the news for the wrong reasons in recent days involving one kind of Cyber Fraud or the other. There have been many Phishing frauds and KYC failure reports as well as organized money laundering in the Bank. The Bank has been defending itself in Courts by effectively manipulating the law to delay justice to the genuine customers. RBI has so far been mild in reprimanding the Bank. It has only resorted to imposing fines for KYC failures and not resorted to more drastic measures such as cancellation of some branch licenses where KYC failures were observed as a part of a systematic procedure to boost branch business.
This mild reprimand by RBI has enabled the Bank to continue its “Negligent Banking”
Way back in 2011, there was a report in Hindu Business Line where it was suspected that Axis Bank ATM software could have been hacked. (See report here). The more recent incident in Mumbai where 29 customers have found that their ATM cards have been cloned and used abroad for withdrawing around Rs 13 lakhs in cash (See report here) shows that Axis Bank continues to practice “Negligent Banking” and makes depositor’s money vulnerable to frauds.
Today’s Economic Times reports yet another ATM fraud of Rs 80000/- from Gurgaon in which another Axis Bank ATM is involved. In this case involvement of local frauds loitering in the ATM centers were involved.
In all these cases there is a clear indication that Axis Bank has failed to maintain a reasonable level of security at its ATMs which has caused the losses. It is therefore time for RBI to revisit its ATM security instructions and if it is found that Axis Bank has been systematically neglecting the security at its ATMs, RBI should consider suspending or cancelling the ATM licenses of Axis Bank.
In one of the news paper reports it is mentioned that Axis Bank would pay the victims from “Insurance”. Axis Bank resorts to such settlement selectively when the victims are celebrities. In the instant case the victims are Policemen whose assistance is perhaps required by Axis Bank to support its other not so legal activities. But when it comes to other common customers, Axis Bank is known to try all its tactics to twist the law to harass the customers until they agree to bear the loss of fraud caused by the Bank’s negligence.
RBI needs to examine the fraud reporting and management practices of Axis Bank,check if RBI’s Cyber fraud guidelines are being followed and take steps to tighten the security against frauds.