The banking industry in India is facing serious cyber threats and cyber crimes. Issues like ATM frauds, RTGS frauds, Internet banking frauds, etc are increasing in India. Cyber security of banks in India is not up to the mark and even the Reserve Bank of India (RBI) has admitted this lapse of cyber security on the part of Indian banks and warned them accordingly.
RBI has also prescribed some mandatory and optional cyber security due diligence requirements for banks of India. However, banks in India are not following these due diligence requirements. As a result we are witnessing many regulatory violations on the part of Indian banks and an increased amount of financial frauds happening at many banks.
The latest to add to this list is the cyber fraud that happened at YES Bank that resulted in a financial loss of Rs 1 crore. Although one person has been arrested in this regard yet RBI has decided to investigate the matter itself.
RBI would on Monday ask for an explanation from the YES bank regarding the financial fraud that has happened at its branch. This is the second case where the real-time gross settlement (RTGS) system has been abused to perpetuate the financial crime.
According to Praveen Dalal, managing partner of ICT law firm Perry4Law and leading techno legal expert of Asia, the RTGS system involves many security features that cannot be bypassed easily. In RTGS system the payment is initiated only after the customer gives a written request for the same. Further, a two way security check in the form of maker and checker has to be undertaken to approve the funds transfer, suggests Dalal.
Meanwhile YES bank is also investigating the case itself and would come up with an explanation on Monday.