Money & Banking

RBI mulls setting up fund to protect victims of online payment frauds

BL Mumbai Bureau | Updated on: Jun 18, 2022

Phishing via internet isometric vector concept illustration. Email spoofing or fishing messages. Hacking credit card or personal information website. Cyber banking account attack. Online sucurity. | Photo Credit: GrafVishenka

Central bank also pushes for real-time reporting of payment frauds

In a bid to provide a security cover to customers being defrauded on online payment platforms, the Reserve Bank of India (RBI) has proposed to set up a study to check the feasibility of creation of a Digital Payments Protection Fund (DPPF).

“With the growing adoption of digital payment modes, there is a rise in digital payment fraud. Inspite of the efforts of stakeholders, the recovery rate of defrauded amounts is not very encouraging. With an aim to provide a security cover to defrauded customers/issuers of payment instruments, a study on the scope / feasibility of the creation of DPPF shall be undertaken,” RBI said in its Payment Vision 2025 document.

The central bank has also suggested enhancements to the Centralised Payments Fraud Information Registry (CPFIR). Scheduled Commercial Banks and non-bank PPI Issuers use the CPFIR for reporting payment frauds. RBI said that access to Urban Co-operative Banks and RRBs shall be examined. “Further, enhancements to the CPFIR in terms of creating negative database of fraudulent beneficiaries, analysing modus operandi of fraudsters, publishing reports on trends in payment frauds, etc., shall be considered,” the vision document states.

“To leverage on the payment frauds reported in CPFIR, it is essential to move towards real / near real-time reporting of payment frauds and put in place an integrated platform for all stakeholders (payment system operators and participants – banks and non-banks, law enforcement agencies, etc) to share information and initiate necessary corrective action to prevent frauds. The Reserve Bank shall engage with the industry and Government to examine the feasibility of integrating CPFIR with other fraud reporting solutions to ensure that a single comprehensive platform is made available for real-time reporting and resolution of payment frauds in the country,” the vision document said.

Crackdown on loan apps

Last year, in November, an RBI Working Group on digital lending, including lending through online platforms and mobile apps, had stumbled upon more than 600 illegal loan apps operating in India. These apps, mostly used to dupe unsuspecting people, are available on several app stores for Android users in the country, the WG said in a report.

RBI Governor Shaktikanta Das had recently said the central bank will bring guidelines related to digital lending soon. We have also been getting many complaints related to digital lending fraud. We are acting promptly against such complaints and are also taking actions separately if and where required,” the RBI Governor had said in April.  

Published on June 18, 2022
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