Mobile Banking Cyber Security Is Required In India

Mobile banking in India is moving towards an acceptance level. However, till now very few people and institutions are comfortable in using mobile banking in India. Mobile banking in India is still not popular according to RBI. There are certain shortcomings of mobile banking in India that are still left unaddressed.

For instance, mobile governance in India is still not well established. M-governance in India is essential before mobile banking can be successfully implemented in India. We have no regulatory framework for m-governance in India. Even the proposed electronic delivery of services bill 2011 of India has failed to provide a mandatory legal framework for electronic delivery of services in India, including for mobile banking. In short, India is still not ready for m-governance and cloud computing especially in the absence of dedicated e-commerce laws in India.

Mobile banking in India is risky due to absence of mobile cyber security in India. Further, online banking system of India is not secure. In the absence of adequate cyber security safeguards, e-banking in India is not safe. The cyber security trends in India 2011 have also proved that Internet banking cyber security in India is in poor shape and it needs to be strengthened. Even data security, privacy and cyber security in Indian banking industry is not satisfactory.

Online banking risks in India are increasing and this is also shaking the confidence of customers in the same. Even RBI has acknowledged risks of e-banking in India. ATM frauds in India are increasing. In fact, Reserve Bank of India (RBI) has recently released the report of its working group on securing card present transaction that covers ATM security and credit card security issues as well. Internet banking risks in India cannot be effectively tackled till we have dedicated Internet banking laws in India.

Although an integrated banking law of India has been proposed yet it may take some years before it is actually enacted. In an interesting development, the RBI removed limits from mobile banking transactions limits in India. This is good for the development of mobile banking in India but is bad for the interests of mobile banking customers who have almost no safeguards against cyber crimes and technology assisted financial frauds happening in the mobile banking field.

The cyber law in India has prescribed cyber law due diligence for various stakeholders. Cyber due diligence for banks in India is just a part of the same. Cyber due diligence for Indian companies including banks operating in India is very stringent. However, Indian banks are not following the guidelines of RBI prescribing mandatory cyber security requirements for banks of India. Further, banks are also liable

Even on the policy front, mobile banking has received a bad response form Indian government. For instance, absence of effective encryption laws in India and non use of robust encryption in India has made the mobile security very weak in India. Instead of making the encryption requirements redundant and weak, India must concentrate upon further strengthening the same for better and secure mobile communications. Governments of most developed countries allow the usage of strong encryption standards ranging from 128 bits to 256 bits or more to ensure the security of sensitive information exchanged via Internet and other networks. However, India is still clinging to 40 bits encryption standards for the simple reason that intelligence and security agencies of India are not capable enough to break strong encryptions.

A weak mobile banking infrastructure would also affect other projects and schemes as well. For instance, recently the Securities and Exchange Board of India (SEBI) has declared about its intentions to introduce electronic initial public offer (E-IPO) in India. This is a good step but E-IPO cannot succeed in the absence of strong mobile banking and Internet banking infrastructure. Online payments mechanisms in India must also be suitable strengthened to make such proposals workable.

India must give these considerations some serious thoughts if it wishes to encash the benefits of technology. Otherwise, concepts like Internet banking and mobile banking are more nuisance than luxury in India.

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.