Page 8 - BANKING FINANCE MARCH 2024

RBI CORNER

Reserve Bank

RBI cautions against KYC Crime Reporting Portal posed to adopt a principle-based
(www.cybercrime.gov.in) or through framework for authentication of digi-
updation fraud cybercrime helpline (1930). tal payment transactions to promote

In the wake of continuing reports of
alternative mechanisms other than the
customers falling prey to frauds being Rs. 8,897 crore of Rs. 2,000 popular SMS-based One Time Pass-
perpetrated in the name of know your words (OTP).
customer (KYC) updation, the RBI has notes yet to return to RBI
asked the members of public to exer- The Reserve Bank of India (RBI) said Rs Speaking during the monetary policy
cise caution and due care to prevent 8,897 crore of Rs 2,000 bank notes, statement address, RBI Governor
loss and safeguard themselves from which were withdrawn from circulation Shaktikanta Das said although the cen-
such malicious practices. from May last year, are yet to be re- tral bank had not specified any particu-
turned to the banking system. lar Additional Factor of Authentication
The modus operandi for such frauds
usually involves customers receiving The total value of Rs 2,000 banknotes (AFA) mechanism, SMS-based OTP has
unsolicited communications, including in circulation, which was Rs 3.56 lakh become very popular.
phone calls, SM and emails, through crore at the close of business on May However, in recent years, with techno-
which they are manipulated into re- 19, 2023, when the withdrawal of Rs logical advancements, alternative au-
vealing personal information, account 2,000 banknotes was announced, has thentication mechanisms have
and login details, or installing unautho- declined to Rs 8,897 crore at the close emerged and in order to aid in their
rized or unverified apps through links of business on December 29, 2023, the adoption, RBI has proposed to consti-
provided in the messages, the RBI said. RBI said in a release.
tute a principle-based framework for
"Such communications often employ As much as 97.50 per cent of the Rs the same, he said.
tactics of creating a false urgency and 2,000 banknotes in circulation as on
threatening of account freezing, block- May 19, 2023, has since been re- "Therefore, to facilitate adoption of
ing and closure, if the customer fails to turned, the release said, adding that alternative authentication mecha-
comply. When customers share essen- these notes continue to remain legal nisms for enhancing the security of
tial personal or login details, fraudsters tender. digital payments, it is proposed to put
gain unauthorized access to their ac- in place a principle-based framework
counts and engage in fraudulent activi- New rules for verification for authentication of such transac-
ties," the RBI said. tions," Das said.
of digital payments on
In case of financial cyber frauds, mem- The central bank also suggested
bers of public should immediately lodge cards streamlining the "onboard process" of
a complaint on the National Cyber The Reserve Bank of India (RBI) pro- Aadhaar Enabled Payment System

8 | 2024 | MARCH | BANKING FINANCE