Fighting digital financial fraud: India needs new laws to reach global standards

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₹276 crore in FY23. While this figure may seem small in the context of the banking sector's total assets, the expanding digital landscape underscores the urgent need for durable strategies to fight cybercrime, ensuring consumer confidence and trust. In a joint effort, the Department of Telecommunications has blocked 140,000 mobile numbers involved in financial frauds, along with several lakh SIM cards.

The department is also leveraging technology to identify and weed out mobile phone connections or mobile numbers which have been disconnected to prevent frauds. These and other digital initiatives are crucial steps forward, yet more needs to be done, especially regarding customer protection—a lesson underscored by global experiences and the current state of India’s financial sector grievance redressal mechanisms. In contrast, Europe and the West are enacting new laws and securing commitments from major tech companies to shield consumers from online fraud.

In the UK, for instance, the telecommunications regulator, Ofcom, is associated with a new law – Online Safety Act – which will kick in later this year. Major tech firms have agreed to a voluntary Online Fraud charter, committing to anti-fraud measures, including prompt detection of fraud and educating users on avoiding scams. This complements the National Economic Crime Plan and Fraud Strategy, unveiled last year and to run until 2026, aiming to curb financial crimes with the cooperation of tech firms, social media platforms, and telecom companies.