By Ashwani Mishra, Editor-Technology, 63SATS
In a significant move to safeguard the financial landscape, the Reserve Bank of India (RBI) is intensifying its efforts to monitor mule accounts and strengthen IT and cybersecurity systems across Indian banks.
RBI Governor Shaktikanta Das highlighted these initiatives during a recent press conference, pointing out the critical need for heightened vigilance in the wake of increasing digital frauds and global IT disruptions.
Enhanced Monitoring of Mule Accounts
Governor Das explained that most Indian banks now have sophisticated systems to monitor unusual activities in mule accounts, which are often used as intermediaries for illicit financial transactions. “Banks have enhanced their transaction monitoring systems to detect idiosyncratic transactions, such as sudden increases in frequency or amount, particularly those conducted late at night,” Das stated. This proactive approach is part of broader efforts to sensitize banks to potential fraud risks.
IT and Cybersecurity Urgency
The call to strengthen IT and cybersecurity infrastructure comes amid a backdrop of a major global outage reported by Microsoft, affecting various industries worldwide. “This incident underlines the vulnerability of over-reliance on big-tech and third-party technology solutions,” Das remarked. He stressed the importance for banks and financial institutions to develop robust risk management frameworks that encompass IT, cybersecurity, and third-party outsourcing arrangements.
Rising Cyber Threats
The urgency of these measures is underscored by data from the Indian Computer Emergency Response Team (CERT-In), which shows a dramatic increase in security incidents from 53,117 in 2017 to over 1.32 million by October 2023. The majority of these incidents involve unauthorized network scanning and probing, highlighting the critical vulnerabilities in network security.
Collaborative Efforts to Secure Digital Finance
To combat the rise in digital frauds and secure the financial sector, the RBI is working closely with the Indian Cyber Crime Control Centre (I4C) and other agencies. This collaboration aims to curb the misuse of mule accounts and enhance the overall security infrastructure of the financial system.
As digital transactions continue to grow, the RBI’s focused efforts on monitoring and mitigating risks associated with mule accounts and enhancing cybersecurity protocols are more vital than ever. With robust systems and collaborative efforts, India’s banking sector is better equipped to face the challenges of an increasingly digital economy.
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