In response to the growing issue of financial fraud, the Reserve Bank of India (RBI) has mandated that banks and payment system operators closely track domestic money transfers. This new directive aims to curb the increasing rate of money scamming and fraud by ensuring more robust monitoring and verification processes for transactions.
BulletsIn
- The Reserve Bank of India (RBI) has directed banks and payment system operators to monitor domestic money transfers to combat fraud.
- Banks are required to maintain records of basic details such as the name and address of beneficiaries for all cash pay-out services.
- For cash pay-in services, banks and business correspondents (BCs) must register customers using a verified cell phone number and a self-certified ‘Officially Valid Document (OVD)’.
- Transactions by remitters must be authenticated with an Additional Factor of Authentication (AFA) to enhance security.
- RBI Governor Shaktikanta Das has urged banks to take stronger measures against mule accounts and digital frauds.
- A committee led by Abhaya Hota, former CEO of NPCI, was established to create a digital public infrastructure platform to address payment frauds.
- In June, the RBI hosted its third global hackathon, ‘HaRBInger 2024 – Innovation for Transformation,’ to develop technology-based solutions for financial fraud.
- The new regulation aims to address the surge in online frauds, which increased by 334% year-on-year to 29,082 cases in FY24.
- The financial impact of these fraud cases rose significantly, with amounts involved reaching INR 1,457 Cr in FY24, up from INR 227 Cr in the previous year.
- The RBI’s annual report for the fiscal year ended March 2024 highlighted the rise in fraud cases involving cards and the internet.
