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RBI Cautions Against KYC Updation Fraud, Issues Dos And Don’ts As Cases Spike

As digital transactions grow, online fraud cases have also seen an upsurge, with 14,483 incidents recorded in 2023-24, according to the Reserve Bank of India data.

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Outlook Money
February 3, 2024
Digital Fraud

Digital Fraud

The Reserve Bank of India (RBI) has issued a fresh notification with dos and don’ts to warn the public against increased online fraud, particularly related to KYC updation and RBI Cautions Against KYC Updation.

According to RBI data published in December 2023, digital fraud cases increased to 14,483 between April and September last year from 5,396 incidents in the same period a year ago. The report noted that digital adoption has made the system fast and transparent but has also increased online fraud.

Senior citizens are particularly vulnerable due to a lack of familiarity with online processes and age-related issues. However, RBI’s ‘Report on Trend and Progress of Banking in India 2022-23’ highlights that the money involved in fraud dropped to a six-year low of Rs 2,642 crore, with cases related to ‘advances’ and card and internet payments being the highest.

Lately, fraud cases related to Know Your Customer (KYC) update have been a major concern.

RBI has cautioned customers to be vigilant while submitting documents for KYC updation. RBI has also asked the banks and other regulated entities to act appropriately. On February 2, it issued another list of do’s and don’ts to avoid digital fraud during KYC updation.

These directions will keep you safe from online fraudsters.

Fraudsters’ Modus Operandi

According to RBI, the fraudsters call or send SMS and emails to manipulate customers to share personal information like a bank account, login ID and password details or ask them to install fake apps through shared links. They will show urgency and ask customers to take prompt action to avoid account freeze. Once they share the details, they access the account and steal money.

Precautions Advised By RBI

RBI advises that if you receive a request for KYC updation through such channels, you should approach the bank or the financial institution directly to confirm. Also, you should obtain customer care numbers or other contact information only from their official websites.

You should contact the bank to understand the KYC updation process, and in case of any cyber fraud, you should report it immediately. Additionally, you must keep your data secure. Do not share login ID or password, PINs, OTPs, card information, etc., with anyone. Do not share KYC documents or copies with unknown persons or organisations, and never share any sensitive data through unverified or unauthorised websites or mobile applications. Additionally, do not click on suspicious mobile or email links.

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