CBI Director Stresses Upon Technology Awareness Among Bank Officers

Recently the third conference of chief vigilance officers (CVOs) of public sector banks and financial institutions was held at the new central bureau of investigation (CBI) headquarters building. The director of CBI Shri Amar Pratap Singh advised the CVOs of banks and financial institutions to adapt to changing technology and sensitise staff to new methods of frauds.

Delivering the Key Note Address, Director CBI Shri Amar Pratap Singh said that CBI’s role is to investigate the criminality in bank frauds and it does not interfere in cases of prudent commercial judgement, even if such decisions involve risks or have resulted in losses to banks.

The Director, CBI called upon banks to adapt to changing technology and to sensitise its officers to new methods of fraud which are of late, noticed in electronic payments, technology related payments like RTGS, Credit Cards, ATM, Cell Banking, Internet Banking etc. Director CBI said the Banking Sector has lost as much as Rs.1883 crore and Rs. 2017 crore during 2008-09 and 2009-2010 respectively. These include over 200 frauds of above Rs One crore during each year.

Shri A.P. Singh stated that banking officials are guiding Investigating Officers in scrutiny of financial statement, credit appraisal etc which has enhanced the professionalism of CBI, in detecting bank frauds.

The Conference discussed important issues such as Preventive Vigilance, E-Tendering/E-Procurement and Forensic Auditing. The services of bank officers are being utilised in various branches of CBI such as Bank Security and Fraud Cell, Economic Offences Unit and Anti Corruption Units in the CBI Headquarters as well as regions.

The call from CBI director came after G Gopalakrishna, the executive director of Reserve Bank of India (RBI) said that all Banks would have to create a position of Chief Information Officers (CIOs) as well as Steering Committees on Information Security at the Board Level at the earliest. The idea is to use information technology to the maximum possible extent while maintaining the cyber security of banks.

While RBI and CBI have done a great job yet banks and financial institutions in India are not taking these directions and recommendations seriously. Till now the directions of RBI to appoint CIOs and steering committee has not been followed by banks of India. Similarly, banks of India are also at fault for ignoring the cyber security requirements. The RBI has even said that mobile banking in India is not yet popular due to low adoption of technology by banks. Let us hope the banks and financial institutions would take cyber law, cyber crimes and cyber security issues seriously very soon.

Mobile Banking In India Still Not Popular Says RBI

Electronic banking in India is still at the infancy stage. Whether it is electronic banking, Internet banking, mobile banking or any other form of e-banking, Indian banks have yet to take the lead. Further, in the context of mobile banking, mobile security in India is also emerging as a roadblock. This has also made mobile banking in India risky. Absence of encryption laws in India has further made the mobile security very weak in India.

Recently, G Gopalakrishna, the executive director of Reserve Bank of India (RBI) said that all Banks would have to create a position of Chief Information Officers (CIOs) as well as Steering Committees on Information Security at the Board Level at the earliest. The idea is to use information technology to the maximum possible extent while maintaining the cyber security of banks.

However, banks in India are shying away from using technology assisted banking. Indian banks have shown little progress in the areas of mobile banking and cash at point-of-sales (PoS) terminals, even after nearly two years of the RBI allowing banks to run such facilities.

According to G. Padmanabhan, chief general manager, RBI, though the number of users who registered for mobile banking is substantial in absolute numbers, it is very low vis-à-vis the number of mobile phone subscribers. Implementation of some of the policy directives, which were emanated largely on the demands of stakeholders, has been far from satisfactory, he said.

Earlier this month, RBI had raised the limits on mobile-based transactions without end-to-end encryption from Rs 1,000 to Rs 5,000. The limits on mobile-based semi-closed prepaid instruments issued by non-banks were also raised from Rs 5,000 to Rs 50,000.

RBI has been taking many pro active reforms for the banking sector of India. RBI is not only ensuring strict compliance with various laws, regulations and norms but is also prescribing various policies and strategies for effective and secure banking in India. Further, deviant behaviour of banks is also punished by RBI from time to time. It seems RBI needs to be stricter regarding implementation of its policies and recommendations.