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The Finance Ministry has reported to a Parliamentary Committee that frauds reported for ATMs and others have seen over 65 per cent growth in 2022 from 2021, while amount involved has nearly doubled. At the same time, National Payment Corporation of India has informed that on an average, 2,000 customers are impacted every month due to cyber fraud.
Meanwhile, the committee has reported establishment of a centralised overarching regulatory authority specifically focussed on cyber security. It also pitched for automatic compensation system by the Reserve Bank of India. These are part of the committee’s report on ‘Cyber security and rising incidence of cyber/white collar crimes’ which was tabled in Parliament on Thursday by its Chairman Jayant Sinha.
On trends in cybercrime, Revenue Department of the Finance Ministry said: “In 2021, we saw the total frauds reported for ATMs and other frauds were about 10.80 lakh and the value was ₹1,119 crore. That means for every 67,000 transactions, one fraud was committed. For 2022, 17.80 lakh is the number we have. The amount is ₹2,113 crore. For every 64,000 transactions, one fraud was committed.”
Also read: Financials, e-commerce, gaming sectors most prone to cyber frauds: Study
Four trends in cybercrimes
The department listed four trends in cybercrimes which include use of crypto for money laundering and terror financing, use of mule accounts with false addresses, use of international online betting sites both for the purpose of money laundering and terror financing and use of lending apps and apps for investment. On people affected by cybercrimes, NPCI gave the average number of 2,000.
The committee recommended centralised overarching regulatory authority specifically focused on cyber security on the lines of Directorate General of Civil Aviation, “The proposed authority would shoulder the responsibility of safeguarding the nation’s critical IT infrastructure and networks from cyber threats,” it said.
To enhance the prevention and detection of fraud in the banking sector, the committee recommended the establishment of a Central Negative Registry. It said there should be an automatic compensation system as devised by RBI and it should be the financial institution’s sole responsibility to immediately compensate the hapless customer, pending further investigation and final traceability of funds.
It also recommended the establishment of a Single Point of Contact system within each district police department. This system may streamline the reporting process and facilitate efficient handling of cyber fraud cases. It believed that promoting supervisory co-operation and knowledge exchange with global regulators will facilitate a collective response to the exponentially growing cyber threats.
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