New Delhi: The parliamentary panel on information and technology wants the government to create a centralised database to record digital payments-related cyber frauds, and institute a new nodal agency to enable redressal mechanisms for victims, people familiar with the matter said.
In a meeting held on Friday to adopt reports for the demands for grants of the government for the coming fiscal, the panel noted the need for a centralised repository to aid in the prevention of such frauds. “With the widespread adoption of digital modes of payments, there is a likelihood in the rise in frauds relating to digital transactions which need to be curtailed by adopting proper security safeguards, quick response and effective grievance redressal system,” the panel found.
India has seen a steep increase in instances of cyber fraud. According to data maintained by the National Crime Records Bureau (NCRB), 6,229 cases regarding fraud (Sec. 420 r/w 465,468-471 IPC) for cyber crime (involving communication devices as medium/target) were registered in 2019, 10,395 in 2020 and 14,007 in 2021, the home ministry said in Parliament in December 2022.
Digital Payment related transactions are managed by the National Payments Corporation of India (under the Reserve Bank of India). HT’s called and sent messages NPCI to check if it maintains a record of digital payment related frauds but did not receive a response immediately.
{{/usCountry}}Digital Payment related transactions are managed by the National Payments Corporation of India (under the Reserve Bank of India). HT’s called and sent messages NPCI to check if it maintains a record of digital payment related frauds but did not receive a response immediately.
{{/usCountry}}While the National Crime Records Bureau maintains a separate category for online banking frauds, there is no separate category for digital payment frauds.
At present, cyber crimes involving theft of money from people’s bank accounts is coordinated by the Indian Cyber Crime Coordination Centre (I4C) of the Union home ministry. All states and union territories have been on-boarded on the MHA portal, cybercrimes.gov.in, which is currently the focal point for reporting cyber crimes. These include 177 banks, e-wallets, UPI service providers, e-commerce companies, among others. “While the portal great initiative launched by the ministry to curb the menace of cybercrime in general and cybercrime against women and children in particular, there are certain grey areas that need to be addressed,” the panel said.
It has asked the IT ministry to create the database as “promotion of digital transactions including digital payments” has been allocated to it.
“There is a need to have a commensurate focus on coordination between different stakeholders in the digital payments ecosystem such as the fintech apps, telecom service providers, respective banks, RBI, MHA and the local police, which are currently working in silos.”
This, the panel noted, has led to victims running from “pillar to post”, having to deal with multiple stakeholders causing “undue harassment”.
It has also urged the government to consider creating a new nodal agency having all the stakeholders to increase coordination and create standard operating procedures in case of such frauds.
It has added that in many instances, the amount involved in digital payment-related fraud may not be significant enough for the victim to initiate a formal complaint. “In other instances, there may be an attempt to coerce a target by means of social engineering or through lucrative deals via messages and emails without the actual fraud happening. In such a situation, a portal may not help the victim.”
To prevent such incidents from going unreported, the panel recommends that the ministry of electronics and information technology create centralised database/helpline or nodal agencies where such cases can be reported. “Such a database would not only help prevent instances of fraud but can be of immense value to stakeholders in the digital payments system, including CERT-In, law enforcement agencies, fintechs, banks, telecom service providers and RBI.”
The panel also asked the IT ministry share the data of frauds of different types of digital payments, which can range from online banking to UPI frauds, but which it had not received until the report was finalised.
According to NS Nappinai, Supreme Court lawyer and founder of Cybersaathi, digital payment frauds as a separate category ought to be dealt with by RBI, including the process of collection of data to evaluate better remedies. “Whilst NCRB may still collect data the same would not suffice to meet the requirement,” she said. “Further the cybercrime portal alone cannot be an answer to the travails of the victims. If the House Panel really intends all to report such crimes, they have to also indicate what law proposes as remedies for such victims particularly through recovery of money lost. There are international precedents that the House Panel ought to evaluate including the option for creating a fund to reimburse victims of digital payment crimes. RBI or NPCI would be the right fit for such data collection and formulation of victim facing remedies”.