RBI Sounds Alarm on Rising Digital Fraud in India

RBI Urges Banks to Enhance Cybersecurity Measures to Protect Customers

The Reserve Bank of India (RBI) has issued a strong advisory to financial institutions, cautioning them about the rising incidents of digital fraud in India. As cyber threats continue to evolve, RBI Governor Sanjay Malhotra has urged banks and non-banking financial companies (NBFCs) to enhance their cybersecurity measures and adopt stricter fraud prevention mechanisms.

One of the key initiatives announced by the RBI is the introduction of secure web domain names for financial institutions. Banks will be required to use the domain extension “.bank.in”, while NBFCs will adopt “.fin.in” to create a more secure online environment. These domain names aim to prevent phishing attacks, where fraudsters create fake websites that mimic legitimate banking portals to steal customer credentials. The registration for these domains is set to begin in April 2025.

The advisory also stresses the importance of robust fraud detection mechanisms, urging financial institutions to invest in advanced cybersecurity tools such as artificial intelligence (AI)-powered fraud detection systems and real-time transaction monitoring. The RBI has advised banks to strengthen their Know Your Customer (KYC) procedures and educate customers on safe digital banking practices.

RBI’s caution comes at a time when India is witnessing a surge in digital transactions, making cybersecurity a top priority. According to recent reports, digital fraud cases have been rising, with cybercriminals targeting online banking, UPI transactions, and credit card users through phishing, malware attacks, and social engineering scams.

By implementing stricter cybersecurity policies and educating both financial institutions and customers, the RBI aims to create a safer digital banking ecosystem. The advisory serves as a crucial reminder for banks and NBFCs to proactively tackle cyber threats and protect consumer trust in India’s rapidly growing digital economy.

Rahul Shankar Yadav

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