RBI to launch digital payments intelligence platform to prevent financial fraud

The Reserve Bank of India (RBI) said that it will establish a dedicated platform to address digital payment fraud in the country. 

Governor Shaktikanta Das highlighted the increasing instances of digital payment fraud and stressed the need for a system-wide approach to prevent and mitigate these frauds.

"Growing instances of digital payment frauds highlight the need for a system-wide approach to prevent and mitigate such frauds," Das said. 

To move this initiative forward, the RBI has constituted a committee to examine various aspects of setting up the platform. The committee is expected to provide its recommendations within the next two months.

Who will be involved in setting up the platform?

The panel responsible for this initiative will be chaired by Abhaya Hota, former CEO of the National Payments Corporation of India (NPCI), who played a crucial role in transforming India into a digital economy.

The committee will include representatives from major banks such as the State Bank of India, HDFC Bank, and ICICI Bank.

Additionally, key figures from the payments industry, including Vipin Surelia from Visa, Arif Khan from Razorpay, Jitendra Gupta from Jupiter, and Pranay Jhaveri from Euronet, have been appointed as members.

Rising financial fraud in the country

The need for this platform arises from a significant increase in digital payment fraud. In the financial year 2023-24 (FY24), 36,075 digital frauds were reported in banks, marking an increase of nearly 166% from the 13,564 cases reported in FY23.

Despite this rise in cases, the amount involved in these frauds decreased by 46.7%, dropping to Rs 13,930 crore from Rs 26,127 crore in FY23. 

An analysis revealed that private sector banks reported the highest number of fraud cases, while public sector banks accounted for the majority of the fraud amounts.

Most fraud cases occurred within digital payments, particularly involving cards and internet transactions.

What will the platform do?

The proposed Digital Payments Intelligence Platform aims to leverage advanced technologies to combat payment fraud.

It will focus on network-level intelligence and real-time data sharing across the digital payments ecosystem. This initiative is seen as essential for sustaining trust in digital payments. 

"Minimising fraud is essential to sustaining trust," said Adhil Shetty, CEO of Bankbazaar.com. He added that the RBI’s proposal to establish the platform is a significant step forward in combating payment fraud.