DFS Secy seeks stricter curbs on online fraud

In a proactive step to enhance cyber security in financial services sector and curb online financial frauds, the Department of Financial Services (DFS) of the Ministry of Finance has called upon banks and financial institutions to phase out use of regular 10-digit numbers and use specific number series such as ‘140xxx’ for commercial/ promotional activities as well as share information in a standardised format for ease of analysis by law enforcement agencies.

The suggestions follow a meeting chaired by Secretary, DFS Vivek Joshi with stakeholders to follow up on the issues discussed in the last meeting related to cyber security in the financial services sector on 28 November, 2023 and to discuss the increasing incidents of recent online financial frauds. The meeting also takes on import in the context of the RBI’S concern on these challenges and risks and its view that banks should focus on fortifying cyber security. Deputy Governor Rajeshwar Rao, in his address at an industry conclave in November 2023, highlighted increasing technology-induced risks like fraudulent apps and that the efforts of the banks to provide timely solutions to customer grievances have not kept pace with explosion in technology. The RBI has also issued a master direction on ‘Information Technology Governance, Risk, Controls and Assurance Practices’ which was notified on 7 November, 2023 and will take effect from 1 April, 2024. The DFS meeting reviewed the preparedness of the banks and other financial institutions in tackling the challenges arising from cyber security in the financial services sector, increasing trend of digital payment frauds and readiness of all the concerned stakeholders in this regard. Among the agenda is onboarding of banks/ financial institutions on the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) platform through API integration and integration of CFCFRMS platform with National Cybercrime Reporting Portal (NCRP) with the aim to centralise the platform that will enable effective collaboration between police, banks, and financial institutions, allowing for real-time monitoring and prevention of fraudulent activities.

Another issue taken up at the meeting was ensuring round-the-clock availability of resources to promptly address complaints will improve fraud-to-hold ratio