News & Analysis

RBI Proposes New Fraud Registry 

The central bank is considering such a move to keep India's banking system clean through creation of a central database of fraudsters

The Reserve Bank of India has proposed a new database that would comprise websites, phone numbers and other details of fraudsters who have been using the country’s banking system to dupe people of their money. 

Ever since the banking system went digital, cases of online frauds have grown at an exponential pace with tricksters using all possible means to get bank customers to share their digital identities, which is then used to remove cash from the bank accounts of such gullible people. 

Currently, RBI is holding discussions with various stakeholders as well as enforcement agencies to create a framework for this registry. Senior officials of the central bank said opinions of several departments that include payment, settlement and supervision is also being sought so that the registry, when created, would prevent fraud to a great extent. 

The registry will also carry data of fraudsters who dupe banks from time to time. Such users often commit fraud in one bank and then go to another one, knowing that in the race for growing customer base, banks hardly fulfill the necessary KYC, barring the customary check of Aadhar documents or similar stuff. 

Though the central bank hasn’t indicated any timeframe for the registry, the officials said that all the participants would be given access once it goes live so that there is almost real-time monitoring of fraud. Customers would also be educated about the fraudsters as well as the risks they could be taking by trusting people at the other end of voice calls. 

In recent times, fraudsters have started calling senior citizens in small towns and villages asking them to reveal their digital identities after claiming that they’re part of a bank team checking for fraudulent account holders. Gullible users who end up sharing these details then find that their bank account has been robbed. 

In another related development, the RBI integrated Ombudsman Scheme would oversee customers of the core investment company. Thus far since its launch last September, the Ombudsman Scheme has received more than 418K complaints of which more than 97% had been resolved. 

Not surprisingly, a vast majority of these complaints related to issues around ATM/debit cards, mobile & electronic banking, and credit cards. 

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