In the wake of jump in digital monetary transactions during the pandemic and also failures of and frauds involving these transactions, the Reserve Bank of India (RBI) will be issuing rules for digital payment security controls. The central bank in its Statement on Development and Regulatory Policies issued today announced that it will be putting out the RBI (Digital Payment Security Controls) Directions, 2020.
The measure is aimed at ensuring that digital transactions such as Net banking transfers, mobile banking, UPI, card payments etc. can be made more securely without the risk of fraud and failure rate of these transactions can be reduced to the minimum.
The statement said: Going by the pre-eminent role being played by digital payment systems in India, RBI gives highest importance to the security controls around it. Now it is proposed to issue Reserve Bank of India (Digital Payment Security Controls) Directions, 2020 for regulated entities to set up a robust governance structure for such systems and implement common minimum standards of security controls for channels like internet, mobile banking, card payments, among others. While the guidelines will be technology and platform agnostic, it will create an enhanced and enabling environment for customers to use digital payment products in more safe and secure manner. Necessary guidelines will be issued separately.
There have been reports that digital payment frauds have been on the rise during the pandemic as individuals have been using the digital payments option heavily to conduct monetary payments/transactions safely. Further, increase in the volume of digital payments have led to other problems as well such as system failures, technical glitches etc. In the month of October 2020, the UPI processed a total of 2.07 billion transactions worth Rs 3.86 lakh crore.
As per an Economic Times report, one of the reasons for jump in banking frauds is the lack of oversight by bank managers due to work from home situation and change in the existing processes in the last few months.
Recently, the regulator barred HDFC Bank from issuing new credit cards and other digital launches because the bank’s tech systems had failed for a significant time period resulting in consumers’ facing problems.
The new guidelines are aimed at ensuring that such system and technical failures are minimised in the future.