Key Takeaways
- Banks and NBFCs must continuously improve preventive and detective controls to mitigate cyber risks.
- The RBI has asked banks and NBFCs to develop robust incident response and recovery mechanisms, reinforced through periodic testing, for operational resilience.
- The RBI has proposed to extend Additional Factor of Authentication (AFA) to online international digital payments made to offshore merchants.
New Delhi: Amid surge in digital frauds, the Reserve Bank of India (RBI) has asked banks and other Non-banking Financial Corporations (NBFCs) to continuously improve preventive and detective controls to mitigate cyber risks.
“The rapid digitalisation of financial services has brought convenience and efficiency but has also increased exposure to cyber threats and digital risks, which are getting sophisticated day by day. The surge in digital frauds is a matter of concern, warranting action by all stakeholders,” RBI Governor Sanjay Malhotra said in his maiden monetary policy statement.
The Reserve Bank has been taking various measures to enhance digital security in the banking and payments system. Additional Factor of Authentication (AFA) for domestic digital payments is one such measure. It is proposed to extend AFA to online international digital payments made to offshore merchants, who are enabled for such authentication.
Second, the Reserve Bank shall implement the ‘bank.in’ exclusive Internet Domain for Indian banks. Registration of this domain name will commence from April this year. This will help avoid banking frauds. This will be followed by the ‘fin.in’ domain for the financial sector.
Banks and NBFCs must continuously improve preventive and detective controls to mitigate cyber risks. They must develop robust incident response and recovery mechanisms, reinforced through periodic testing, for operational resilience.
