The banks blocked the recipients’ accounts and has been able to recover Rs 649 crore out of Rs 820 crore, which is about 79 percent of the amount.
The Reserve Bank of India (RBI) has asked some banks to brace for heightened threats of cyber attacks and beef up their security to mitigate such risks, according to industry sources. To subscribe please click tau.id/2iy6f and access our live channel.
The RBI alert follows the latest round of Cyber Security and Information Technology Examination (CSITE) by the central bank. The RBI has also provided action points wherever the inspection spotted deficiencies.
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The CSITE helps the RBI assess various capabilities of banks, including disaster management readiness, internet and mobile banking platform capabilities, and fraud detection efficiency.
The inspection team looks deep into the IT systems of all lenders, identify grey areas and issue action points. It also serves as an independent review, initiated several years ago, to bolster cyber security surveillance.
Distinct from routine risk assessments, the CSITE, scrutinises banks’ disaster management readiness, internet and mobile banking platforms, and fraud detection mechanisms.
“The RBI conducts a separate inspection to identify deficiencies in the cyber security capabilities of banks. This time, they met us and have given a list of action points where deficiencies need to be addressed.”
On February 9, RBI Deputy Governor T Rabi Sankar had said that the banking sector needs to be prepared for new cyber security risks. “We need to think of customer convenience and other things and we need to provide services,” he said at the 19th Banking Technology Conference in Mumbai.
Cyber security risks on the rise
Sankar highlighted that banks may have to completely rebuild their encrypted systems to identify and mitigate the risks of artificial intelligence (AI) abuse. “We also need to understand the problems with AI. And the ability to crunch huge data in a short time, you would have to completely rebuild your encrypted system.”
The RBI’s caution comes from a spurt in cyber security breaches in the banking system in the recent years. According to a government response in Parliament, India’s banks had reported 248 successful data breaches by hackers and miscreants between June 2018 and March 2022.
There have been continuing instances of cyber security issues in the following period as well. Out of the 248 data breaches, 41 were reported by public sector banks, 205 by their private peers, while foreign banks reported two cases.
Conclusion
To counter the cyber security risks, the RBI has a separate framework on Cyber Security Framework for Scheduled Commercial Banks (SCBs), whereby the lenders are required to implement cybersecurity and IT controls, among other things, for prevention of data leakage from its systems.
