Banks to set up portal with real-time information to handle digital frauds

Banks are planning to set up a common negative registry of fraudsters to provide real-time information to all banks to prevent digital fraud.

They have initiated discussions with the Reserve Bank of India (RBI) on the proposed portal, according to a report in The Economic Times (ET).

A senior bank executive said that the portal will help lenders connect and stop and trace funds being transferred from one account to multiple accounts.

The bank executive said, "In most cases of digital fraud, money is transferred into multiple accounts spread across various banks and financial entities. This becomes too difficult to trace at times, leading to delays. The portal will put an end to these issues."

He added that deliberations are on to find synchronisation between the online dispute resolution (ODR) by the RBI and the unified dispute and issue resolution (UDIR) provided by the National Payments Corporation of India.

During 2022-23, public sector banks reported 3,405 frauds involving Rs 21,125 crore, while private banks reported 8,932 cases involving Rs 8,727 crore. This is for fraud involving Rs 1 lakh and above, according to the ET report.

Another bank executive said that a standard operating procedure (SOP) is being prepared to stop unauthorised transactions mid-way.

"If all stakeholders are following the same process, it will be faster to address such fraudulent transactions," he said.

Earlier, banks had asked the RBI to fix a threshold for reporting fraud transactions on Daksh, an advanced supervisory management system.

Since January 2023, all RBI-authorised payment system operators (PSOs), providers, and payment system participants in India must report all payment frauds, either reported by customers or detected by the entities themselves.

"To streamline reporting, enhance efficiency, and automate the payments fraud management process, the fraud reporting module is being migrated to Daksh, the Reserve Bank's advanced supervisory monitoring system," the RBI said in its circular.