Basics
- Why in News: Rising cybercrime targeting UPI, digital banking, and e-commerce, exposing weaknesses in institutional preparedness and consumer protection.
- India’s digital leap: Driven by affordable internet, UPI-based digital banking, e-commerce, and digital governance.
- Impact: Enhanced inclusion, convenience, and growth in financial and social services.
- Problem: Parallel rise of cybercrime, exploiting system loopholes and human psychology.
Relevance
- GS2 (Governance, Security): Institutional capacity, citizen trust, regulatory reforms.
- GS3 (Science & Tech, Internal Security): Cybercrime, AI/ML applications in governance.
Nature of Cybercrime in India
- Techniques used:
- Phishing (fake links/emails to steal data).
- OTP/UPI frauds (victims unknowingly authorise transfers).
- Loan scams & job scams (targeting vulnerable groups).
- Identity theft (misuse of Aadhaar, PAN, bank details).
- Remote access scams (malicious apps give criminals control of devices).
- Digital arrests (impersonation of police/customs, fake warrants, psychological coercion).
- Key Feature: Relies less on hacking skills, more on social engineering (fear, urgency, trust, greed).
Vulnerable Groups
- Elderly → often digitally illiterate but with savings.
- Rural populations → low awareness, weak cyber literacy.
- Job seekers & loan applicants → easily lured by fake offers.
- Even educated urban users → break down under psychological pressure.
Case Illustrations
- Retired banker (78 yrs): lost ₹23 crore across 21 transactions.
- Lawmaker’s wife: lost ₹14 lakh but recovered due to swift action.
- Lesson: Delay = irreversible loss, Swift reporting = possible recovery.
Institutional Gaps
- Banks:
- Limit themselves to advisories.
- Weak KYC → mule accounts thrive.
- Fail to detect unusual patterns (multi-crore debits unchecked).
- Customer data leaks widely.
- Cyber police:
- Understaffed, under-skilled, under-equipped.
- Poor use of the 24-hour golden window.
- Victims trapped in delays → criminals escape.
- Systemic apathy: Thousands of daily cases; many unreported due to stigma & lack of trust.
Evolving Nature of Fraud
- Earlier → ATM skimming, small-scale theft.
- Now → organised, large-scale, tech-enabled, cross-border.
- Fraud patterns:
- Abnormally large transfers vs normal profile.
- Multiple high-value debits in short intervals.
- Sudden inflows into dormant/fake KYC accounts (mule accounts).
- Quick layering → money dispersed across small banks, recovery blocked.
Possible Interventions
- AI/ML-based monitoring:
- Personalised transaction profiles → detect deviations.
- Anomaly detection for mule accounts & abnormal activity.
- Temporary holds on suspicious transactions.
- Cross-institutional cooperation:
- Real-time fraud intelligence sharing between banks, telecoms, and cyber police.
- Immediate alerts across the financial ecosystem.
- Empowering Cyber Police:
- AI-driven real-time detection tools.
- 24×7 response teams within the golden 24-hour window.
- Global data-sharing & cross-border cooperation.
- Strengthening Banks:
- Plug KYC loopholes.
- Blockchain for secure data & tamper-proof records.
- Proactive, not advisory-only, approach.
The Way Forward
- Shift from reactive complaint-handling → proactive prevention.
- Adopt protection-first framework: citizen safety & digital trust as foundation of financial stability.
- Swift compensation to victims (RBI mandate) → restore trust.
- Tech solutions (AI, ML, Blockchain) exist → what is missing is institutional will & accountability.
