The government is pushing public sector banks to work directly with the Indian Cybercrime Coordination Centre (I4C) to tackle the growing problem of financial frauds.
In a letter dated January 17, the Department of Financial Services wrote to the chief executive officers of all public sector banks to directly integrate with the back-end systems of I4C by the end of this month.
“It is kindly requested to complete the API (application programming interface) integration with I4C by January 2025,” said the letter, a copy of which is available with ET.
An API integration would mean that any complaint on financial fraud registered with the I4C will be instantaneously routed to the bank concerned through their back-end systems, thereby allowing speedy remedial action.
Additionally, banks have been asked to explore the use of Mulehunter.Ai, a product that has been built by the Reserve Bank of India Innovation Hub (RBIH) to detect mule accounts.
RBIH chief executive Rajesh Bansal had told ET in November last year that the product uses artificial intelligence (AI) to detect mule accounts and that two banks have already started using it.
Mule accounts are those which are opened fraudulently in the name of an unsuspecting citizen, but actually gets used by a fraudster, typically to siphon off funds.
The ministry has also asked banks to come on board the 'suspect registry' being built by I4C. This registry brings the data around fraudulent transactions and mule accounts together, which can be used to detect such accounts proactively even before they get misused.
“Banks may use the registry for proactive monitoring of transactions and suspicious identifiers as an extra layer of check,” the letter said.
"This real-time integration with I4C’s National Cybercrime Reporting Portal will help the banking sector. Our solution, first implemented with Punjab National Bank, is showing how we can set new standards in fraud prevention and complaint resolution—something that every bank in India needs to prioritise in today’s digital age," said Balaji Suryanarayan, director, CustomerXPs, which runs Clari5, a fraud management platform which works with banks.
This move comes at a time when the government is pushing the use of Citizen Financial Fraud Reporting and Management System (CFFRM), a portal where any Indian who has been financially defrauded can lodge an official complaint.
Through the portal, banks, financial intermediaries and payment firms are brought onto the same platform to ensure any complaint can be resolved in a time-bound manner.
“Usually fraudsters siphon off the funds from the victim’s account, move it via multiple mule accounts, to be eventually encashed at an ATM or taken out of the country,” said a top executive at a fintech firm which works with banks to detect mule accounts.
“The I4C tries to arrest this fund flow by alerting the bank or payment wallet company concerned so that the account can be instantly frozen and transactions denied,” he said.
Responding to queries around financial fraud raised in Parliament, minister of state Nityanand Rai said the citizen fraud reporting platform has helped save a total of Rs 3,431 crore in response to more than 990,000 complaints. Through this partnership with financial institutions, 560,000 fraudulent transactions have been declined, effectively saving Rs 1,400 crore.
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“It is kindly requested to complete the API (application programming interface) integration with I4C by January 2025,” said the letter, a copy of which is available with ET.
An API integration would mean that any complaint on financial fraud registered with the I4C will be instantaneously routed to the bank concerned through their back-end systems, thereby allowing speedy remedial action.
Additionally, banks have been asked to explore the use of Mulehunter.Ai, a product that has been built by the Reserve Bank of India Innovation Hub (RBIH) to detect mule accounts.
RBIH chief executive Rajesh Bansal had told ET in November last year that the product uses artificial intelligence (AI) to detect mule accounts and that two banks have already started using it.
Mule accounts are those which are opened fraudulently in the name of an unsuspecting citizen, but actually gets used by a fraudster, typically to siphon off funds.
The ministry has also asked banks to come on board the 'suspect registry' being built by I4C. This registry brings the data around fraudulent transactions and mule accounts together, which can be used to detect such accounts proactively even before they get misused.
“Banks may use the registry for proactive monitoring of transactions and suspicious identifiers as an extra layer of check,” the letter said.
"This real-time integration with I4C’s National Cybercrime Reporting Portal will help the banking sector. Our solution, first implemented with Punjab National Bank, is showing how we can set new standards in fraud prevention and complaint resolution—something that every bank in India needs to prioritise in today’s digital age," said Balaji Suryanarayan, director, CustomerXPs, which runs Clari5, a fraud management platform which works with banks.
This move comes at a time when the government is pushing the use of Citizen Financial Fraud Reporting and Management System (CFFRM), a portal where any Indian who has been financially defrauded can lodge an official complaint.
Through the portal, banks, financial intermediaries and payment firms are brought onto the same platform to ensure any complaint can be resolved in a time-bound manner.
“Usually fraudsters siphon off the funds from the victim’s account, move it via multiple mule accounts, to be eventually encashed at an ATM or taken out of the country,” said a top executive at a fintech firm which works with banks to detect mule accounts.
“The I4C tries to arrest this fund flow by alerting the bank or payment wallet company concerned so that the account can be instantly frozen and transactions denied,” he said.
Responding to queries around financial fraud raised in Parliament, minister of state Nityanand Rai said the citizen fraud reporting platform has helped save a total of Rs 3,431 crore in response to more than 990,000 complaints. Through this partnership with financial institutions, 560,000 fraudulent transactions have been declined, effectively saving Rs 1,400 crore.
