The Union government announced an overhaul to KYC norms for mobile phone connections and said there will be new checks on bulk distributors in a major attempt to crack down on a burgeoning underground cyber fraud industry that runs on fake connections.
Read here: Centre makes police verification mandatory for SIM card dealers, discontinues bulk connections
The new steps include additional requirements for mobile phones users — they will now need to mandatorily submit their documents if they, for instance, seek SIM replacements — and for dealers selling SIM cards (or connections), who will need to be verified by the telecom companies.
“We came up with these steps after discussions with police, telecom companies. We saw field dealers take shortcuts. These measures will improve accountability,” said Ashwini Vaishnaw, the Union minister for communications.
In a statement issued later, the government called the measures KYC (know-your-customer) reforms and POS (point-of-sale) registration reforms, with the latter referring to dealers who sell mobile phone connections, as part of its “fight against the menace of cybercrimes and financial frauds” under the Sanchar Saathi initiative.
For the first category, there are three new protocols for how their identity will be verified. First, in case they use Aadhaar, dealers will need to scan the QR code to authenticate the customer. Second, someone replacing or swapping a SIM card will need to submit their documents afresh. Third, facial-ID based authentication will be allowed for those presenting their Aadhaar as evidence.
A phone number that has been disconnected will not be recycled for at least 90 days, it was decided. “The new rules will come into effect on October 1,” said the minister.
The protocols for dealers included new compliances for telecom companies, which will now need to register franchisees, agents and distributors. All such entities will need to be registered within 12 months, the government’s statement issued later added, saying that dodgy dealers can be blacklisted for three years and there could be a penalty of up to ₹10 lakh.
{{/usCountry}}The protocols for dealers included new compliances for telecom companies, which will now need to register franchisees, agents and distributors. All such entities will need to be registered within 12 months, the government’s statement issued later added, saying that dodgy dealers can be blacklisted for three years and there could be a penalty of up to ₹10 lakh.
{{/usCountry}}The minister also said the Department of Telecommunications has discontinued issuing bulk connections and instead a new concept of business connection will be introduced.
“Besides, KYC of businesses, KYC of person taking handover of SIM will also be done,” Vaishnaw said.
As on April, India had a little over a billion active mobile connections, according to data from the Telecom Regulatory Authority of India (Trai). Police officials probing cyber frauds — which involve attackers using phone calls or SMS messages to fool people into sending money or being hacked — said the KYC mechanism has failed to ensure all connections belong only to verified customers and, as a result, scammers use connections that cannot be traced back to them.
Today, interstate gangs are involved in such operations, which the government does not yet track as a separate crime.
But the government statement gave new figures that offer a rare estimation: Of the 1.14 billion connections analysed, 6.6 million were flagged as suspected, 5.2 million were disconnected after they were not reverified, more than 67,000 dealers were blacklisted, over 17,000 mobile handsets blocked and at least 300 FIRs have been registered against more than 1,700 dealers and around 800,000 bank/wallet accounts used by fraudsters have been frozen
“Indisputable verification of SIM dealers will be mandatory to curb frauds. Penalty of ₹10 lakh will be imposed on dealers found violating norms,” Vaishnaw said.
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“For such cyber fraud, two things are needed — a SIM card and a bank account — and both are easily available and supplied to cyber criminals, despite proper KYC being must for both. In many cases, police found that people in whose names the SIM cards were issued or the bank accounts were opened were unaware of the misuse,” said Amit Dubey, a cybersecurity expert who has worked on cyber forensics with law enforcement agencies, who welcomed the changes.
“It highlights that criminals are taking advantage of gaps in the existing norms. That’s why it was important for the government to change rules and formulate new, stringent and effective guidelines to keep a check on such illegal activities. The new guidelines issued by the government was much needed, as it will surely help in curbing cyber crimes and keeping a check on cyber criminals,” he added.