FinMin for enhanced KYC norms for banks
Makes a case for extensive due diligence by banks, FIs for onboarding merchants to safeguard customers against cyber risks
New Delhi: In a bid to check incidence of BoB World app scam and other such financial frauds, the Union Finance Ministry makes a case for an enhanced KYC procedure and extensive due diligence by banks and financial institutions (FIs) for onboarding merchants to safeguard customers against cyber risks, sources said.
Appropriate due diligence of merchants and Business Correspondents (BCs) who offer banking services in rural and remote areas is necessary not only to check frauds, but also to fortify the financial ecosystem, sources said.
According to sources, there is a need to strengthen data security and data protection at the level of merchants and BCs as chances of compromise are higher at that level. Therefore, sources said, RBI may advice banks and financial institutions to review the concentration of BCs in cyber fraud hotspots and their onboarding, blocking of micro ATMs found to be involved in frauds. This was one of the suggestions made at an inter-ministerial meeting held recently with the objective of furthering cyber security and checking financial fraud, sources said.
During 2023, as many as 11,28,265 cases of financial cyber fraud worth Rs7,488.63 crore were reported, as per NCRB.
