RBI cautions banks on ATM frauds, misuse of SWIFT messaging

In view of the large scale reach of ATMs in semi-urban and rural areas and a massive addition of new customers under the Jan Dhan scheme with ATM cards, it is of utmost importance that ATM operations are carried out in a completely sanitised manner, according to the Reserve Bank of India. Referring to frauds in the technology environment, which have been accentuated through malware attacks and skimming frauds in ATMs in the recent past, the RBI, in its latest Report on Trend and Progress of Banking in India, said: “While the Reserve Bank has issued caution advices and specific instructions in this regard, banks need to be vigilant.” The central bank also flagged the misuse of SWIFT (Society for Worldwide Interbank Financial Telecommunication) messages by employees and attacks on the SWIFT messaging system of banks.

The RBI said the instances of large-scale foreign exchange (forex) remittances in the guise of import advances/ payments is another area of supervisory concern. While banks may not have any credit exposures to such parties remitting forex, misuse of banking channels for such remittances is a serious concern, and, therefore, banks need to enhance rigour in their data analytics and reporting structures to aid board-level governance, it added. The Reserve Bank said it has enhanced regulatory and supervisory instructions in this regard.

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