Cyber Crime
RBI Set to Empower Banks with Authority to Freeze Fraud-Linked Accounts
RBI plans to let banks freeze accounts suspected of cybercrimes, bypassing the need for police reports, in response to rising online fraud affecting millions.
India’s central bank, the Reserve Bank of India (RBI), is set to empower banks to temporarily freeze accounts suspected of being involved in cyber crimes. This change comes amidst alarming government data revealing that cybercriminals have stolen nearly $1.26 billion from unsuspecting individuals since 2021. Shockingly, sources report that an estimated 4,000 fraudulent accounts are opened daily!
The new guidelines aim to address a critical loophole in the current system. Currently, banks can only freeze accounts after a police complaint is filed, a process that can take days due to the sheer volume of cybercrime complaints. This delay allows cybercriminals to quickly siphon off funds from compromised accounts, leaving victims high and dry.
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Under the proposed reforms, banks will be authorized to suspend suspicious accounts based on information provided by the Indian Cybercrime Coordination Centre (I4C), a government agency dedicated to fighting cyber fraud.
The I4C maintains a central repository of data on misused bank accounts, electronic devices, mobile connections, and even details of identified cybercriminals. This information will be accessible to banks, police, and telecom operators, allowing them to collaborate more effectively. In just the past three months, the government has already suspended about 250,000 accounts linked to fraudulent activities.
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This enhanced information sharing will not only enable banks to freeze suspicious accounts swiftly but also help them identify and suspend other accounts potentially linked to the same criminal activity. By uncovering networks of fraudulent accounts, authorities hope to significantly disrupt cybercriminals’ operations.
The move has been lauded by many as a crucial step towards protecting citizens from online financial scams. However, some experts point towards the need for a centralized investigative body solely dedicated to cyber crimes. This dedicated agency could streamline investigations, improve coordination between different agencies, and potentially lead to faster apprehension of cybercriminals.
The RBI’s proposed reforms mark a significant shift in India’s fight against cybercrime. By empowering banks and fostering better information sharing, authorities hope to create a more robust defense against online fraudsters and safeguard citizens’ hard-earned money.