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Digital Payment Fraud Combat: Key Measures for Preventing Digital Payment Frauds and Cyber Threats in India



Digital Payment Fraud Combat: Key Strategies and Collaborative Efforts Unveiled

New Delhi: In a bid to combat the rising tide of cyber threats and online financial frauds, the Secretary, Department of Financial Services (DFS), Ministry of Finance, chaired a crucial meeting in New Delhi. The meeting brought together key stakeholders from various departments, banks, and financial institutions to discuss strategies and address the growing concerns surrounding cyber security in the financial sector.

Tackling Digital Payment Frauds: A Collaborative Effort

The meeting delved into the escalating trend of digital payment frauds, emphasizing the need for a cohesive approach to safeguard citizens’ financial well-being. A significant milestone was achieved with the disconnection of 70 lakh mobile connections associated with cybercrimes and financial frauds, identified through digital intelligence platforms. This decisive action has shielded 3.5 lakh victims from potential financial losses, amounting to Rs. 900 crore.

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Key Takeaways from the Meeting

  • Strengthened Coordination: The meeting highlighted the importance of seamless collaboration between law enforcement agencies, banks, and financial entities to swiftly track and block fraudulent transactions.

  • Expanded CFCFRMS Platform: A call was made to bring all financial institutions, including NBFCs and major cooperative banks, under the ‘Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS)’ platform. Currently, 259 financial intermediaries are already onboarded.

  • Combating Mule Accounts: Banks were urged to devise effective strategies to tackle the menace of mule accounts, which are often used to launder illicit funds.

  • Enhanced Response Time: Banks were instructed to improve their response time in handling alerts on online financial frauds received from various agencies.

  • Nodal Officers for Law Enforcement: The appointment of regional/state level nodal officers by banks and financial institutions was recommended to facilitate smooth coordination with law enforcement agencies.

  • Centralized Merchant Registry: The establishment of a centralized registry for onboarding merchants and standardization of KYC procedures was emphasized.

  • Whitelisting Digital Lending Apps: A consultative approach was advocated to whitelist digital lending apps, ensuring adherence to regulatory guidelines.

  • Digital Lending Working Group Recommendations: The meeting reviewed the progress on implementing the recommendations of the Digital Lending Working Group, which include setting up the Digital India Trust Agency (DIGITA) and introducing the ‘Banning of Unregulated Lending Activities (BULA) Act’.

  • Customer Awareness and Sensitization: All stakeholders were urged to undertake comprehensive customer awareness and sensitization programs to promote digital payments security.

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Insights from Stakeholders

The Indian Cyber Crime Co-ordination Center (I4C), Ministry of Home Affairs, presented an insightful analysis of digital payment frauds, drawing from data gathered through the National Cyber Crime Reporting Portal (NCRP). They shed light on the modus operandi of fraudsters, the various sources of these financial frauds, and the challenges faced in countering cybercrimes.

State Bank of India (SBI) representatives shared their experiences with the Proactive Risk Monitoring (PRM) strategy, highlighting its effectiveness in identifying and mitigating potential fraud risks.

PayTM and Razorpay representatives also contributed their best practices, showcasing their strategies for preventing and detecting online financial frauds.

The meeting concluded with a renewed commitment from all stakeholders to work in unison to safeguard the financial system and protect citizens from cyber-attacks and online financial frauds. The collaborative efforts outlined during the meeting are expected to significantly enhance cyber security measures and strengthen the resilience of the financial sector against emerging threats.

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