Mobile banking in India is moving towards an
acceptance level. However, till now very few people and institutions
are comfortable in using mobile banking in India. Mobile
banking in India is still not popular according to RBI.
There are certain shortcomings of mobile banking in India that are
still left unaddressed.
For instance, mobile governance in India is still
not well established. M-governance
in India is essential before mobile banking can be
successfully implemented in India. We have no regulatory
framework for m-governance in India. Even the proposed
electronic
delivery of services bill 2011 of India has failed to
provide a mandatory legal framework for electronic delivery of
services in India, including for mobile banking. In short, India
is still not ready for m-governance and cloud computing
especially in the absence of dedicated e-commerce
laws in India.
Mobile
banking in India is risky due to absence of mobile
cyber security in India. Further, online
banking system of India is not secure. In the absence of
adequate cyber security safeguards, e-banking
in India is not safe. The cyber
security trends in India 2011 have also proved that
Internet
banking cyber security in India is in poor shape and it
needs to be strengthened. Even data
security, privacy and cyber security in Indian banking industry
is not satisfactory.
Online
banking risks in India are increasing and this is also
shaking the confidence of customers in the same. Even RBI
has acknowledged risks of e-banking in India. ATM
frauds in India are increasing. In fact, Reserve Bank of
India (RBI) has recently released the report of its working group on
securing
card present transaction that covers ATM security and
credit card security issues as well. Internet
banking risks in India cannot be effectively tackled till
we have dedicated Internet
banking laws in India.
Although an integrated
banking law of India has been proposed yet it may take
some years before it is actually enacted. In an interesting
development, the RBI removed limits from mobile
banking transactions limits in India. This is good for the
development of mobile banking in India but is bad for the interests
of mobile banking customers who have almost no safeguards against
cyber
crimes and technology assisted financial frauds happening
in the mobile banking field.
The cyber
law in India has prescribed cyber law due diligence for
various stakeholders. Cyber
due diligence for banks in India is just a part of the
same. Cyber
due diligence for Indian companies including banks
operating in India is very stringent. However, Indian banks are not
following the guidelines of RBI prescribing mandatory
cyber security requirements for banks of India. Further, banks are
also liable
Even on the policy front, mobile banking has
received a bad response form Indian government. For instance, absence
of effective encryption
laws in India and non use of robust encryption in India
has made the mobile security very weak in India. Instead of making
the encryption
requirements redundant and weak, India must concentrate
upon further strengthening the same for better and secure mobile
communications. Governments of most developed countries allow the
usage of strong encryption standards ranging from 128 bits to 256
bits or more to ensure the security of sensitive information
exchanged via Internet and other networks. However, India
is still clinging to 40 bits encryption standards for the
simple reason that intelligence and security agencies of India are
not capable enough to break strong encryptions.
A weak mobile banking infrastructure would also
affect other projects and schemes as well. For instance, recently the
Securities and Exchange Board of India (SEBI) has declared about its
intentions to introduce electronic
initial public offer (E-IPO) in India. This is a good step
but E-IPO cannot succeed in the absence of strong mobile banking and
Internet banking infrastructure. Online payments mechanisms in India
must also be suitable strengthened to make such proposals workable.
India must give these considerations some serious
thoughts if it wishes to encash the benefits of technology.
Otherwise, concepts like Internet banking and mobile banking are more
nuisance than luxury in India.
Source: Legal
Enablement Blog Of Perry4Law.
