Indian Banks Failing to Protect Their Cyber Security
In Thane, Maharastra some unidentified fraudsters hacked the server and tampered with the data of a cooperative bank. According to Police, the hackers allegedly siphoned off Rs. 1.51 crore to various accounts from the Dombivli Nagarik Sahkari (DNS) bank on March 12.
Following the attack, a case has been registered against unidentified persons under section 420 (Cheating and dishonestly inducing delivery of property) of the Indian Penal Code (IPC) and section 65 of the Information Technology Act at Manpada police station under the Kalyan division who has started a probe into the incident in collaboration with Thane cyber police.
The security incident draws light on the issue of bank frauds that have become deep-seated in the Indian Financial System. In just over seven years, Indian banks have witnessed frauds surpassing $5 trillion with total fraud loans amounting to Rs. 1.37 lakh crore in the last year alone.
Shocking scams like Punjab National Bank (PNB) scam (2018), Cosmos Bank cyberattack (2018), Canara Bank ATM Hack (2018), along with many other vishing, phishing, ATM skimming, and spamming attacks have continued to plague Indian banks over the recent years.
With an increase in digital-based transactions, money cheating cases have also witnessed a sharp rise. The techniques and resistance measures employed by banks to safeguard their customers’ financial data and money have met with progressive and sophisticated hacking techniques used by fraudsters in India.
John Maynard Keynes, after examining the condition of banking in India said banking in India should be conducted on the safest possible principles while calling India a “dangerous country for banking”. The apprehension has proven to be prophetic in the modern world as financial institutions failing to conduct prudent banking have become the center of monetary scams.
Reportedly, the State Bank of India (SBI), HDFC Bank, and ICICI Bank constituted a majority of incidents totaling more than 50,000 fraudulent incidents in the last 11 fiscal years.
Digitalization in India has led to the manifestation of ‘Digital Money’ and cashless transactions have been on a continual rise. Consequently, the protection of data and privacy becomes more important as a fragile cybersecurity system can have serious repercussions for any bank’s customer base.
Data breaches have emerged to be a serious threat in the banking sector which further amplifies the need for an impenetrable banking system as recovering from data breaches and regaining control of a breached server can be extremely stressful and time-consuming.
In order to strengthen the evolution of the banking system, banks require to identify and plug the gaps in security. Part of the problem can be attributed to the accelerated pace of digitization which has increasingly required the same kind of investment on the cyber hygiene side as well.
Some of the viable measures that banks can undertake include proactive security techniques like ‘Whitelisting’ (blocks unapproved programs while only allowing a limited set of programs to run) and BIOS passwords (prevents external access to systems and servers). Awareness of employees, stringent filtering, and communicating regularly with regional offices are some of the other preventive measures as advised by the security experts.
