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Net Banking Frauds in India

A bank fraud is the use of illegal means to obtain money, assets, or other property that is either owned or held by a financial institution, or that obtains money from depositors by fraudulently posing as a bank or other financial institution.
Written by:
Shivi Gupta
Published on
24-Jul-18

IT minister Ravi Shankar Prasad stated that around 10,220 cases of net banking frauds in India were reported in the December 2017 quarter!

What is a Net Banking Fraud?

A bank fraud is the use of illegal means to obtain money, assets, or other property that is either owned or held by a financial institution, or that obtains money from depositors by fraudulently posing as a bank or other financial institution.

Last year, the ICICI Bank topped the list of banks that had witnessed the most number of bank frauds in 2016, with state-owned SBI taking the second spot. In fact, in a matter of hardly 9 months, as many as 455 fraud cases involving sums of Rs. 1 lakh and above were detected in ICICI Bank, closely followed by SBI (429), Standard Chartered (244) and HDFC Bank (237).

A net banking fraud is one the most common types of fraud that is conducted in the present times. With the advent of ‘Digital India’ and a march towards ‘cashless society’, the number of online banking transactions has considerably increased. There is also a lack of personal touch and cyber criminals easily manipulate the network or electronic device to hack the Bank’s server for committing net banking fraud.

 

What are the Types of Bank Frauds?

A net banking fraud is a type of cyber crime that involves acquiring money, assets or other property of a net banking user. Net Banking Fraud is further classified into the following kinds of bank frauds: 

  • Identity Theft: Identity theft involves stealing of the personal information and credentials, including the account details of a user. This information may be obtained by someone who fraudulently poses as agent of a financial institution to misuse this information.
  • Vishing:  It is an attempt where the cyber criminal steals a user’s personal information like Customer ID, Net Banking password, ATM PIN, OTP, Card expiry date, CVV etc. through a phone call. 
  • Money Mule:  In this kind of bank fraud, the hacker contacts the customers via online mediums to convince them to receive money into their bank accounts on the basis of fake exchange of commissions or promises of quick money.  The fraudster transfers the money to a mule’s account. This illegal transfer form a chain, one mule transfers to the other and so on. 
  • Phishing Fraud:  This type of bank fraud involves establishment of fake websites of renowned banking institutions inviting the user to login by using their personal information. Fake links are created to redirect a customer for the purpose of eliciting information from them under the garb of an authentic-looking website.

Legal Regime to Control Banking Frauds in India

The Reserve Bank of India has set up a ‘working group on internet banking' to examine various aspects of the concept of net banking. The focus of these laws is on technology, legal, regulatory, supervisory, and security issues, and include the following aspects:

  • The Consumer Protection Act, 1986 defines the rights of consumers who are availing banking services. Since banking is a service that is defined in the Act, a consumer complaint can be filed against the bank for lack of safe banking services.
  • Section 3(2) of the Information Technology Act, 2000 provides for technologies to authenticate the source of electronic record. 
  • Banks are bound to comply with confidentiality of the customer’s accounts. 
  • Banks in India have to provide a safety valve to the consumers.

In India, net banking frauds are conducted amass and the laws prevalent are complicated. It is important to hire a cyber crime lawyer to file a cyber complaint against a bank fraud. 

The cyber crime lawyer in India can file a well-drafted cyber complaint by including the relevant information of the kind of bank fraud, damages caused, response of the bank, and legal remedy sought. A cyber complaint is filed in the cyber cell of the city where you live or the bank fraud took place.

It is always suggested that one must consult top cyber crime lawyers to have a strong case against the employer and make an informed decision about how to proceed with the case. MyAdvo connects you with the best cyber crime lawyers in India to take a legal action against any kind of net banking fraud in India. Email us at info@myadvo.in or call us at +919811782573.