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Cybercrimes,ATMfraud:HowsafeisyourmoneyinModi'scashlesseconomy?
SaiManish/NewDelhi15Nov16|03:55PM
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Justdaysafterthesurgicalstrike"onPakistananddaysbeforethegovernmentannounceditsdemonetisationmoveurgingIndiansto
shifttoacashlesseconomyrunoninternetandplasticcards,Indiareporteditsbiggestinternetbankingsecuritybreach.
Over3milliondebitcardsandtheirpinnumbers,includingthosepoweredbyMastercardandVisa,werestolenbyhackers.The
MinistryofFinancereportedthatRs2.5lakhwasstolenfromtheaccountsofIndians.Multiplepublicandprivatebankswereaffected.
ThenatureoftheattackwassuchthatanyindividualusingthesecardsacrossIndiawouldhavebeenvulnerabletohermoneybeing
stolen.

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WithFinanceMinisterArunJaitleyandhissecretaryShaktikantaDaspropagatingmobilewallets,internetbankingandotherformsof
cashlesstransactionsusingtheinternet,Indiansneedtobeaworriedlot.ThatsbecauseIndiasbankingsystemandprivatemobile
walletsarehighlyvulnerabletosuchattacksthatputthehardearnedmoneyofpeopleatrisk.
ADeloittereportin2015estimatedthatinternetbankingfraudsconstituted59%ofthecybercrimesinIndia.
ATMfraud,internetbanking,debitandcreditcardcloningmadeupfor42%ofthetotalinternetrelatedbankingfraud.Thereport
noted,Cyberattacksonfinancialinstitutionsarebothincreasinglydiverseandthereforeunpredictableandarealsoheretostay.
Manyofthesecontinuetobedrivenbyfinancialgain.Theimpactofcybercrimeisnotjustfinancial,butalsoontheorganizations
reputationandcustomerconfidence."
Indiansarebankingmorethroughtheinternetthanever.AccordingtoReserveBankofIndia(RBI)data,85%oftheallreported
transactionsatbanksin201516werethroughtheinternetinvolumeterms.In201415,thisfigurestoodat75%.Inpurevalueterms,
95%ofalltransactionsinbanksweredoneelectronically.TheNationalElectronicFundsTransfer(NEFT)facilityrecorded1.2billion
transactionsworth$1.3trillionin201516.Thenumberoftransactionsascomparedtolastyearhadincreasedbyalmost250million.
AreportbyPricewaterhouseCoopers(PwC)draftedalongwithASSOCHAMinJune2015statedthat65%ofthefraudcasesreported
byIndianbankswererelatedtointernetbankinganddebitcards.Theseincludedebitcardskimmingbyinstallationofcamerasand
skimmingmachinesinATMstostealdata.InAugustthisyear,fourRomaniannationalsemployedthistechniqueinKeralaandduped
hundredsofcustomersoftheirhardearnedmoney.TheCBIhasissuedaredcornernoticeagainstthreeofthemafterthepolice
managedtonabonlyoneofthem.Virusattacks,identitytheftsandphishingcontinuetoposeathreatwithIndiansstillunawareabout
protectivemeasures.
ThereportalsostatedthatthenumberofIndiansusingmobilephoneshasshotupdrastically.In2016,thenumberofmobilephone
usersinIndiacrossedonebillion.Withthegovernmenturgingmorepeopletousemobilewallets,thenumberofpeopletransacting
throughtheirmobilescouldalsogoupdrastically.

ThePwCreportstatedthatthenumberofIndiansshoppingthroughtheirmobileshadincreasedby800%in2013.Thereportnoted
thatIndiansweresusceptibletovarioustypesoffraudswhileusingmobilebankingandmobilewallets.Theseobservationsalsoapply
towalletslikePaytmwhichhavebeenaggressivelypromotedafterthegovernmentannounceditsdemonetizationmeasures.
Thereportfurthernotedthatmobilewalletswerepronetomisusewhichcouldleadtounauthorizeddeductionsfromthewalletofa
customerwithouther
Recentreportssuggestthattheirsecuritymeasuresweresolaxthatevenamateurcriminalswereabletomisusethem.Forinstance,
inJanuarythisyear,theBengalurupolicebustedanetworkthatstolemoneyfromthemobilewalletsofAxisBankandStateBankof
India(SBI).Mostofthesemobilewalletsdonotevenhaveanautologofffacility.Thatmeansunauthorizedaccesstoapersonsphone
couldleadtomoneybeingsiphonedofffromthewallet.
Accordingtothereport,mobilebankingtooishighlyriskyinIndia.Manybanksappointathirdpartyvendortodevelopandmanage
mobilebankingapplications.Thisgivesthevendoraccesstocriticalbankaccountinformationofthecustomerwhichcouldbe
misusedbythevendorsrogueemployees.Moreover,thethreatsofsimcardswapsandmalwareaffectingmobilephonesstillremains
agrimreality.
MobilepaymentsinIndiaarestillnotgovernedbyanylegalprovisions.Thesepaymentsaremostlycontractualobligations.Withlax
cybersecurity,theweakestlinkinthischainisthebankcustomer"saysPavanDuggal,aDelhibasedcyberlawexpert.
TheIndianComputerEmergencyTeam(CERTIN)undertheMinistryofElectronicsandInformationTechnologyreportedalmost10000
maliciousvirusattacksin2015.Thisdidnotincludemalwareattacksonmobilephonesbutincludedonlydesktopsystems.Thiswas
morethandoublethecasesithandledin2014.AdecadebackthetotalnumberofcasesreportedtoCERTINwerejust24.But
CERTINonlyhandlescasesthataregiventoitbythegovernment.AmajorityofthecasesarenotreferredtoCERTINandalarge
numberofthemgounreported.ItisalsowellknownthatorganisationslikeCERTINandNationalTechnicalResearchOrganisation
(NTRO),chargedwithIndiascybersecurity,arenotabletofindorretaintalentduetotheministrysbureaucraticstyleoffunctioning.
Whatfurthercompoundstheproblemisthelimitedimmunitythatbankcustomershaveincasetheybecomevictimsofonlinefraud.
TheRBIissuedacircularinAugustthisyearsuggestingnewliabilitynormsforcustomerswhobecomevictimsofonlinefinancial
fraud.TheRBIsnewnotificationisworrisomefortworeasons.Firstly,theRBImentionsthatwhenacustomersuffersalossduetoher
negligence,sheshallbeartheentirelossuntilshereportstheunauthorisedtransactiontothebank.Thiscouldbeproblematic
becauseinmanyonlinefraudsthecustomerwouldnotevenreceiveanotificationforhertransactionandcouldbeunawareaboutit
foralongtime.Moreover,illiteratesandthosewithlimitedknowledgeofbankingfacilitiesinruralareaswouldntbeabletoeven
identifyanonlinefraud.
Secondly,theRBIlimitedtheliabilityofthebankincaseofbreachbyathirdparty.Ifacustomerfailstoreportanunauthorizedonline
transactiononhisaccounttothebankwithinsevenworkingdays,thensheisentitledtonomorethanRs5000ascompensation
irrespectiveofherloss.Incasethecustomertakesmorethansevendaystoreportthefraud,thenthebankisundernoliabilityto
compensateher.
Withthegovernmentnudgingpeopletogocashless,millionsofIndiansstillremainvulnerabletoonlinetheftoftheirhardmoneyover
whichtheymayhavelittlecontrol.

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