RBI and ECGC should consider trade remittances to Hong Kong as Highly Risky




Reserve Bank of India
Exchange Control Department

ECGC of India

Sub: Increasing Hong Kong Risk for Importers and Exporters from India

Dear Sir

I have recently come across two instances of Cyber Frauds which have been targeted at the Importers and Exporters from India which involves Hong Kong as the center of money laundering where the money due to be paid to the Indian businessman was diverted into a false Bank account in Hong Kong. One of the cases involved an importer importing goods from China and another involved an Exporter exporting to Russia.

In both cases, the fraudsters sent e-mail communications to the paying party impersonating as the receiving party and asking the payment to be made to the credit of a Hing Kong Bank account instead of what was originally agreed to.

As a result of these two instances alone, a sum of around Rs 135 lakhs in foreign exchange has not been received by India. The Exporter would now face a loss which will be a liability on the ECGC. The importer has made a payment in foreign exchange without a corresponding import of the equipment leading to his facing liabilities under FEMA.

I consider that these are not isolated incidents and are also not the only two incidents that have occurred. I suspect that all over India by this time several such incidents must have taken place and this will result in huge losses to ECGC besides many of the genuine Importers and Exporters. This will also lead to a higher NPA incidence at Banks.

There is therefore an urgent need for both RBI and ECGC to take remedial action including a criminal action against the fraudulent parties in Hing Kong. Such action cannot be undertaken by the individual parties and has to be front ended by ECGC. The Government of India also need to take up the matter with the respective countries namely Hong Kong, China and Russia since there is a distinct possibility of involvement of local employees of different organizations in each of these countries.

I request RBI and ECGC to immediately caution all exporters as well as Banks about this new modus operandi of Cyber Criminals and advise remedial action.

If more information is required on the two cases referred to from here which are from Bangalore, the organizations may contact me.



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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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