Cyber crime: RBI advises banks to set up redressal system

Concerned over rising incidents of cyber crime, the Reserve Bank of India (RBI) has suggested banks put in place a strong whistle-blowing system, as well as reward employees who help prevent frauds.

“Appropriate mechanisms need to be established in banks...Including transaction monitoring teams in banks and to investigate them (disputes or suspicions raised by stakeholders) thoroughly. Banks should have a well-publicised whistle-blowing mechanism,” RBI said.

This suggestion is part of the central bank’s guidelines on information security, electronic banking, technology risk management and cyber frauds. RBI further said employee awareness is crucial to fraud prevention. “A positive way of creating employee awareness is to reward employees who have gone beyond their call of duty, and prevented frauds. Awards may be given to employees who have done exemplary work in preventing frauds,” the RBI said.

With the advances in information technology, most banks in India have migrated to core banking platforms and have moved transactions to payment cards (debit and credit cards) and to electronic channels like ATMs, internet banking and mobile banking.