Best of BS Opinion: Broader ecosystem response needed to check cyber fraud

Today's Opinion highlights RBI's draft digital fraud framework, Nepal's political churn under Balen Shah, questions around India's growth optimism, LBS reforms, and a book on plastic's global spread.

Hello, and welcome to Best of BS Opinion, our wrap of today's Opinion page.  India’s digital payments revolution has transformed the financial landscape, but it has exposed users to cyber fraud. To address the growing scourge, the Reserve Bank of India (RBI) issued draft directions to review the framework for limiting customer liability, including a compensation mechanism for small-value digital frauds, in such fraudulent transactions, a move that will boost consumer confidence. However, only compensation can't address digital fraud, argues our first editorial, since many incidents are due to low levels of digital literacy and limited awareness of cyber risks. The RBI's proposals depend on how quickly banks deploy real-time fraud detection systems and strengthen their internal cybersecurity infrastructure. A broader ecosystem response is required.  Across the border in Nepal, the four-year-old Rashtriya Swatantra Party, with Balendra 'Balen' Shah leading the charge, is set to sweep national elections, offering hopes of stability in place of frequent coalitions shared among three parties headed by entrenched politicians. This, our second editorial points out, has raised expectations. It has an ambitious slate of promises to fulfil, particularly employment. A large number of educated Nepalese have moved abroad, which means that remittances rather than productive economic activity have become a major driver of consumption. For India, Shah's victory could change the geostrategic outlook, given he is from the Madhesi community that inhabits the border Terai region and has voiced concerns over China's growing influence in the Himalayan nation. That could well mean a new dynamic in Indo-Nepalese ties.  A beguiling theory is doing the rounds, notes Debashis Basu, one that suggests India is currently the hottest ticket for foreign investors, who could make outsize returns on their investments in dollar terms over the next two decades. The reasoning behind this ebullient mood is that India is going to grow at 8 per cent for the foreseeable future, with low inflation, a strong rupee, and sundry reforms across labour and formalisation, among others. The only problem is that it is simplistic, if not downright naive, to believe that India can achieve all of this in an era of slower global trade growth that is also burdened with rising geopolitical tensions. Maintaining eight per cent growth will remain a mirage unless India can move more people out of farms into factories, that will spur demand and boost private capex.  The RBI has issued a new draft circular for the lead bank scheme (LBS), but a little digging into the past indicates that these are not new concerns but were also part of the master circular issued in April 2025. However, M S Sriram points out that the priorities of financial inclusion in the current context are different. The new framework needs to focus on savings-led inclusion, equip users with agency to transact with their own device, given the ubiquity of app-based payments, and, most important, consumer protection. The new high-powered committee must recognise the developments of the past 15 years and contextualise the changes, instead of just tinkering with the existing framework.  Beth Gardiner’s new book, Plastic Inc., uncovers how plastic took over the globe through decades of intensive marketing, political manoeuvring and flat-out deceit, writes Zoë Schlanger. Alarmingly, plastic has now been shown to go beyond degrading the environment to seeping into our bodies, affecting health outcomes around the world. What is scarier, Gardiner writes, is that while plastic was a way for oil and gas companies to wring value out of petroleum, increasing its production is today seen as a safeguard against falling revenue in a world reckoning with the climate consequences of fossil-fuels.