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.
