RBI Governor Sanjay Malhotra flags rising issue of digital frauds

Asks banks to suggest steps for enhancing ease of doing business

Reserve Bank of India (RBI) Governor Sanjay Malhotra flagged the rise in digital frauds while emphasising the need for robust and proactive systems to thwart such attempts during his first interaction with managing directors and chief executive officers (CEOs) of public and private sector banks after taking charge.

 

He also directed banks to enhance oversight over third-party service providers to mitigate risks and strengthen customer service and grievance redress mechanisms.

 

“While dwelling upon information technology risk management and cybersecurity, the governor urged banks to have enhanced oversight over third-party service providers for mitigation of risks emanating from them,” RBI said in a statement. Malhotra took charge as the 26th governor of RBI on December 11, 2024.

 

He also underscored the need for RBI and banks to work together closely. “Suggestions were sought from banks on enhancing the ease of doing business,” the statement said.

 

Malhotra, in his opening remarks, acknowledged the important role played by banks in building the resilience of the domestic financial system, while highlighting some of the main vulnerabilities present globally that could pose downside risks.

 

He urged banks to ensure continued financial stability, deepen financial inclusion, improve digital literacy, enhance the availability and affordability of credit, strengthen customer service and grievance redress mechanisms, and continue to invest in technology.

 

Malhotra, along with Deputy Governors M Rajeshwar Rao, T Rabi Sankar, and Swaminathan J, and executive directors-in-charge of regulation and supervision, met with CEOs of commercial banks.

 

“These interactions are part of the Reserve Bank’s continuous engagement with the senior management of its supervised entities,” the central bank said.