Sunday, September 29, 2013

ICICI Pocket Application May Be Insecure And Violative Of Indian Laws

ICICI’s pocket application/service is an application that allows sending or receiving of money using a Facebook account. Money can be transferred to friends using the application and a redeemable coupon is issued in favour of the transferee friend.

However, doubts have been raised about the legality of such a service and its use in India especially keeping in mind the recent developments in the banking field. Techno legal experts have opined that ICICI’s Facebook application Pockets may be violating Indian cyber and banking laws.  

According to Praveen Dalal, managing partner of New Delhi based ICT law firm Perry4Law and leading techno legal expert of Asia, the Reserve Bank of India (RBI) has recently declared that Risk Management for Card Present Transactions would become operational from 1st October 2013.

Banks that are Negligent in implementing the provisions of the same and other related Notifications by the RBI would be punishable under the provisions of Payment and Settlement Systems Act, 2007 and would also be liable to bear the losses arising out of any Fraud or Illegal Monetary Transactions, informs Dalal.

Presently credit card frauds, ATM frauds and online banking frauds are on rise in India. However, banks are shifting their liability for these frauds and crimes to the victims of these frauds and crimes. Most of the victims are not aware that it is the primary liability of the banks to compensate the victims of such frauds as they have failed to adopt proper cyber security practices.

Before using applications/services like pockets, online users must ascertain the legality and security of the same. No matter howsoever fancy or attractive a service may appear, its consequences must be analysed in advance.