MUMBAI: Stating that the Reserve Bank has no tolerance towards frauds and mis-selling, governor Sanjay Malhotra said the central bank is “dead against financial frauds and mis-selling and that as the regulator will take strictest action against these offences,” and announced the launch of an exclusive ‘.bank.in’ and ‘.fin.in’ Internet domains for banks and non-banks respectively to help curb financial frauds.
Addressing the media during the customary post-policy presser here Friday, the governor also said the lenders will have to issue an additional two-factor authentication for clearing international digital payments involving offshore merchants.
This is to further strengthen the digital payments security, he said, adding this will be on the line of the existing two-factor authentication mandated for onshore payments.
Announcing the launch of an exclusive ‘.bank.in’ and and ‘.fin.in’ domains internet domain for banks to curb financial fraud, the governor said this is to enhance the trust in the financial sector.
“Increased instances of fraud in digital payments are a significant concern. To combat the same, the Reserve Bank is introducing the '.bank.in' exclusive internet domain for our banks. This initiative aims to reduce cyber security threats and malicious activities like phishing; and, streamline secure financial services, thereby enhancing trust in digital banking and payment services,” the governor said after announcing the monetary policy statement earlier in the day wherein he slashed the interest rate by 25 bps to 6.25%.
Malhotra further said, the Institute for Development and Research in Banking Technology (IDRBT) will act as the exclusive registrar for this initiative and registrations will commence from April. Detailed guidelines for banks will be issued separately.
Going forward, it is planned to have an exclusive domain “.fin.in” for other non-bank entities in the financial sector, he added.
Announcing the extension of the two-factor authentication mandatory now for domestic digital payments to offshore payments too where it is done through in the ‘card not present transactions,’ he said the move is aimed at enhancing the safety of transactions which, in turn, provides confidence to customers to adopt digital payments.
While this requirement, is currently mandatory only for domestic transactions, “to provide a similar level of safety for online international transactions using cards issued here, it is proposed to enable AFA (additional factor authentication) for international card not present (online) transactions as well.
“This will provide an additional layer of security in cases where the overseas merchant is enabled for AFA.
A detailed circular will be issued shortly for feedback from stakeholders.
Expressing concerns over the rising incidents of digital fraud, Malhotra called for collective action from all stakeholders. “The surge in digital fraud is a matter of concern. It warrants action by all stakeholders. The Reserve Bank has been taking various measures to enhance digital security in the banking and payment system.”
It can be noted that the National Payments Corporation recently rolled out a new policy enforcing stricter standards for UPI transaction IDs.
Meanwhile, in another development, the governor said to help boost retail participation in government securities, the RBI has also widened access to the NDS-OM platform, which facilitates secondary market trading of these securities.
Non-bank brokers registered with Sebi will now be able to access the platform, deepening the bond market and increasing non-bank financial participation, he said.