Reserve Bank of India will set up a digital payment intelligence platform to go all-out against fraudsters and cybercriminals targeting vulnerable people, RBI Governor Shaktikanta Das said in a statement on the concluding day of the bank’s three-day monetary policy committee (MPC) meeting on June 7.

According to RBI’s annual report for FY2023-24, banking frauds have increased three times over the past year, and frauds related to digital payments (cards and internet) topped the list. Such crimes rose from 1 per cent in FY2022-23 to 10 per cent in FY2023-24.

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Das said, “The reserve bank has taken measures to deepen digital payments while ensuring their safety and security. These measures have boosted consumer confidence. Growing digital payment frauds, however, highlight the need for a system-wide approach to prevent such frauds.”

Growing Threat of Digital Fraud

Due to rapid technological advancements, digital fraud cases have increased in India recently. This has happened despite RBI’s vigil and measures to make the digital payment process transparent and safe and increase public awareness about such crimes. Senior citizens, in particular, are easy targets for fraudsters who select their victims via social media platforms like WhatsApp or through calls by impersonating officials from genuine institutions.

RBI’s annual report recorded 36,075 banking frauds in FY2023-24, three times over the previous fiscal year. Also, the National Cybercrime Reporting portal registered over 7 lakh complaints in the first four months of 2024. Most of all the complaints registered in May have been financial frauds involving email, debit and credit cards, e-wallets, net banking, and UPI.

What Digital Payments Intelligence Platform Will Do?

Das said, “It is, therefore, proposed to establish a Digital Payments Intelligence Platform for network-level intelligence and real-time data sharing across the digital payments ecosystem. The reserve bank has constituted a committee to examine various aspects of the platform.”

The platform aims to reduce payment fraud risks by using advanced technologies. RBI has appointed A.P. Hota, former managing director and chief executive officer of the National Payments Corporation of India (NPCI), as the committee’s chairman to review various safety aspects of digital public infrastructure and recommend steps in the next two months.

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Commenting on the RBI initiative, Amit Sachdev, COO of M1xchange, an online trade exchange, said: “The platform will enable access to vital information on frauds and enhance the efficacy of digital credit analytics enabled on TReDS (a digital payment infrastructure) set up under RBI’s guidelines that enables corporates and PSUs (Public Sector Undertakings) to make 100 per cent timely payments to MSMEs through an end-to-end digital exchange in collaboration with over 60 financial institutions in India.”

Anand Kumar Bajaj, founder, MD & CEO of PayNearby, a fintech company, said, “RBI’s efforts align with the initiatives of fintech companies like ours. These efforts are crucial in supporting the less tech-savvy population and helping them become part of the digital economy.”