Modern Frauds in Indian Digital Banking

Modern Frauds in Indian Digital Banking

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The need for Digitization  was felt in the Indian banking sector in late 1980s , in order to improve the customer service, book-keeping and MIS reporting. In 1988, Reserve Bank of India had also set up a Committee on computerization in banks headed by Dr. C. Rangarajan. Later in 1996, ICICI Bank was first Bank to offer Internet Banking to its Customer for Instant Banking Transactions which boosted other Banks to offer the Digital Internet Banking.

Example of Paytm KYC Frauds

In Today’s world every Banking Transaction is being processed on Real Time basis. Facilities i.e. NEFT/ RTGS/ IMPS have changed scenario of Indian Banking Industry. Every Indian Public and Private Banks offer Mobile/ Internet Banking facilities to its client for Instant Banking Transactions and smooth customer services. Every Bank has developed its new Department of Digital Banking for innovation and launch of new Digital Banking services to customers.

With development of Digital Banking, Central Bank of India (RBI) had conceptualized new model ” Payments Banks ” for boosting up Digital Banking in India. Paytm Payments Bank, India Post Payments Bank, Fino Payments Banks and Airtel Payments Bank are vast examples of Payments Banks in India. As there is tough competition started among these Players. These Payments Banks are offering attractive Cash Backs for Customers. Rise of Digital Banking and Payments Banks have give birth to new Modern Digital Frauds. These Modern Frauds have very bad impact on common people’s Pockets. Everyday in Media news of Cyber Frauds is become a common thing now.

Do you ever think how fraudsters send messages only on your registered number ?

This question comes in many people minds that How can this is possible that Fraudsters contact only on your registered Mobile number . (Mobile number which is Registered in your Bank Account and Payment Bank account.) In Management level Banks are unaware of Data Leakage of customers. Whenever Fraudsters get the data of clients they start sending messages to clients. When customer get into their Trap they face big loss of money.

Major Reasons of Digital Bank Frauds 

Data Leakage of Customers : Majority of Banks / Payments Banks do not have their Inbound Departments of Deliverables. Deliverables department’s responsibility is to dispatch ATM Cards, Cheque Books or any other Account document which is dispatch to client. This process is done by Outsource agencies hired by Banks. These outsource agencies have huge Data of clients. Evil minded people contact these outsource agencies for Data of clients of a particular bank. Even these kinds of Fraudsters offer Shareholding of Revenue to these outsourced  agencies.

Unawareness of Customers : In recent cases it is find that Unawareness of customers lead to Cyber Frauds. Fraudsters pretends as Bank employees , call the customers regarding expiration of KYC in Bank Accounts. They warn the customers that if they will not verify their KYC over telephone customer’s account will be Freeze within 24  hours.

Customer Care Frauds : These days there are lot of fake Web Pages which display Fake Customer Care numbers of Banks/ Payments Banks. Whenever you required to report any Strange Banking Transaction to Bank. You should Visit your Bank’s Official Website for customer care contact details or you should reach your Bank Branch as soon as possible.

Sharing of Online Banking Details : Sometimes customers share login details of their Internet Banking with strange persons. Sharing of  online Banking details is major reason for Cyber Frauds of Indian Banking.


Precautions For Safe Digital/ Online Internet Banking :

  • Do not install any Strange Applications which commit Income or Cash Backs.
  • Do not Share your Internet Banking Login detail with Strangers.
  • Change of Password of Internet Banking  once a Week . Your password should be strong. It should not be guessed by any person.
  • Always access your Online Bank accounts from Safe Location. Your should avoid accessing your online Bank accounts from Public Wifi places or Cyber Cafes.
  • Avoid clicking on Links through E-Mails.
  • Always Log-out from your Internet Banking account whenever you have done your Transaction.
  • Close monitoring of your online Banks accounts.

Where to Report a Online Bank Fraud?

If you are victim of Online Bank fraud, keep calm and have patience. You need following steps to report the same:

Once the card issuer or the bank has been informed about the fraudulent transaction, one should file a written compliant with the nearest police station. “An FIR has to be filed in the local police station only. In case police refuses to file an FIR, the court can be approached under section 156(3) of the Cr PC,” says advocate Puneet Bhasin, a cyber law expert.


About the Article :

The above mentioned information is provided by Mr. Manjot Singh ,is working with IndusInd Bank Ltd. as a Relationship Manager at Business Banking Team. 

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