India to introduce measures to combat cyber fraud: Report

Cyber fraud prevention India: The Reserve Bank of India (RBI) is set to implement new guidelines allowing banks to temporarily freeze accounts suspected of involvement in cyber crimes, as the country grapples with a surge in online fraudulent activities, news agency Reuters reported, quoting three sources familiar with the matter.

The move comes amid internal government data revealing that individuals have incurred losses of nearly $1.26 billion in financial institutions due to cyber fraud since 2021. As per the report, approximately 4,000 fraudulent accounts are being opened daily, highlighting the scale of the challenge facing authorities.

Reports suggest that a significant number of Indians fall victim to telephone scams aimed at gaining unauthorized access to their bank accounts and wallets, resulting in funds being siphoned off into the perpetrators' accounts.

To address this growing threat, the central bank is expected to empower banks to suspend such suspect accounts without the need for victims to file immediate police complaints, as currently required. This proactive approach aims to expedite the process of safeguarding customers' assets, according to the sources mentioned in the report.

While criminals can swiftly drain accounts of funds, banks presently freeze accounts only after the registration of a police report, a process that can be time-consuming given the volume of cybercrimes being reported, the report said.

The proposed suspensions would target accounts frequently utilized for transferring illicitly obtained funds from cybercrimes, the report added.

The RBI intends to update its guidelines for banks based on insights provided by the home ministry's Indian Cybercrime Coordination Centre, which monitors cyber fraud activity across the country. Data from the agency indicates that over the past three months, approximately 250,000 accounts associated with fraudulent activities have been suspended.

However, despite these efforts, a significant number of fraudulent accounts continue to operate unchecked, as regulators and banks are often unable to take action in the absence of formal police complaints.

Authorities plan to leverage information on account holders engaged in fraudulent activities to identify additional accounts held across different banks and suspend them accordingly.

Nevertheless, there is recognition of the need for a centralised body dedicated to investigating cyber frauds, although specific details regarding its establishment remain undisclosed at this stage, according to the report.

(With Reuters inputs.)