Net-banking fraud under RBI lens

Feb 15 2013, 01:27 IST
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SummaryBanks told to monitor number of beneficiaries a customer can add.

Concerned by the recent reports of large scale fraud involving credit cards and online banking, the Reserve Bank of India has asked banks to stringently monitor the number of beneficiaries a customer can add for fund transfer from his bank account and even limit such additions, bankers said.

“These addition of beneficiaries have to be monitored. The moment a large number of beneficiaries are added in a matter of a few hours, something is definitely not right,” said an official at a public sector bank.

For credit card frauds, the RBI could prescribe some broad guidelines to banks including greater security at the merchant end.

Recent media reports said that around R1 crore was fraudulently transferred from a private bank customer's account to various other accounts within an hour through the Real Time Gross Settlement system.

Officials from RBI met bankers last week to take stock of the fraudulent activities in credit cards and online banking and suggest solutions to check the same.

For credit card frauds, the central bank is likely to prescribe broad principles for banks to follow, bankers said. “We are talking to the RBI about how these can be handled and they could prescribe some broad guidelines on the same,” said an official at a private bank.

Unauthorised transactions totalling nearly Rs 30 crore have been conducted on credit cards of Indian customers and a global syndicate is said to have been behind these frauds, according to various media reports.

These frauds have largely been outside the country wherein it is much easier to conduct transactions with just the basic information of the card. Within the country, the RBI has mandated banks to move to chip and pin based credit cards that ask for an additional pin-based authentication for transactions. This move is said to have brought down instances of fraud sharply.

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