Updated April 14th, 2024 at 14:14 IST

FinMin advocates for improved KYC, due diligence to check financial fraud

n 2023, 11,28,265 cases of financial cyber fraud amounting to Rs 7,488.63 crore were reported, as per data from the National Crime Records Bureau (NCRB).

Reported by: Business Desk
Ministry of Finance | Image:ANI
Advertisement

FinMin’s fraud concerns: The finance ministry is advocating for an augmented Know Your Customer (KYC) process and rigorous due diligence by banks and financial institutions to combat scams like the BOB World app and other financial frauds, according to sources.

Sources highlight the importance of thorough due diligence for merchants and Business Correspondents (BCs) providing banking services in rural and remote areas to not only prevent fraud but also boost the resilience of the financial ecosystem. Strengthening data security and protection at the merchant and BC levels is deemed crucial, given the higher susceptibility to compromise.

Advertisement

As part of the effort to improve cybersecurity and curb financial fraud, suggestions were made during an inter-ministerial meeting, including reviewing the concentration of BCs in cyber fraud hotspots and taking action against micro ATMs involved in fraud.

In 2023, 11,28,265 cases of financial cyber fraud amounting to Rs 7,488.63 crore were reported, as per data from the National Crime Records Bureau (NCRB). In response, the central government has established the 'Indian Cyber Crime Coordination Centre' (14C) under the Ministry of Home Affairs to address various cyber crimes across the country comprehensively.

Advertisement

To combat the proliferation of illegal lending apps, the Reserve Bank of India (RBI) is considering the establishment of a Digital India Trust Agency (DIGITA) to verify digital lending apps and maintain a public register of verified apps.

Additionally, the RBI has furnished a list of 442 unique digital lending apps to the IT Ministry for whitelisting with Google. Google, in turn, has removed over 2,200 digital lending apps from its app store between September 2022 and August 2023, following a policy update in alignment with the RBI and the Department of Financial Services under the finance ministry's directives. 

Advertisement

The revised policy allows only apps published by RBI-regulated entities or those collaborating with them to operate on the Play Store.

(With PTI inputs)

Advertisement

Published April 14th, 2024 at 14:14 IST