With over 3.2 million debit cards compromised in India’s largest banking security breach and most customers not paying heed to bank advisories asking them to change their passwords and PINs, the Reserve Bank of India (RBI) is likely to issue new directives in this matter.
The government has also asked the RBI and banks to submit a detailed report on the issue, which is likely to come in by November.
“We have sought a report in the debit card issue. The idea is to contain the damage,” finance minister Arun Jaitley said.
“There is no cause for alarm, the integrity of the IT system of banks is robust and whatever action is required, the government will take promptly,” economic affairs secretary Shaktikanta Das added.
“A preliminary input “sort of report” has already come in, and the government is awaiting further details from the final report… After getting the final report, perhaps it will also be discussed at the FSDC meeting to review the matter comprehensively and give directions to all banks.”
“As you know, in the cyber world, the trail will always be there and it will be our effort to locate, to sort of trace the exact trail and locate the point of origin of where this has happened, and the government will definitely act on this.”
Estimates from various lenders, including Citibank, ICICI Bank and a few public sector banks suggest that only 10% to 15% of card-holders have changed their personal identification number (PIN). There are over 690 million debit card-holders in the country.
Before the breach of financial data, SBI had sent out an advisory to customers asking them to change their PIN, but only 7% took note,” a senior government official said. The bank has now recalled over 600,000 cards, which would be replaced free of cost.
Banking sources said that majority customers do not take the advisories. The Reserve Bank of India is likely to issue a set of directives to all banks in the country.
“We keep sending advisories to customers from time to time to change passwords and PIN, but very few follow instructions,” a senior Citibank official, who did not wish to be identified, told HT.
Between April 2011 and September 2014, banks have reported 27,614 credit-card related frauds and another 3,835 debit-card related deceptions.
This could come as a big blow to the government and the RBI, both of whom are trying to bring in as many people as possible into the formal banking net. While 250 million accounts have already been opened under the government’s flagship Pradhan Mantri Jan Dhan Yojana scheme, the RBI has granted in-principle approval to 22 companies to set up payments banks and small finance banks.
Meanwhile, most banks have decided to review their IT systems.