Saturday, December 19, 2009

Internet Banking In India: Its Risks, Challenges And Solutions

The recent growths of credit cards and ATM frauds have raised certain crucial security questions before the banks and the regulatory authorities. According to experts India has not only weak cyber law but also inadequate Internet banking security procedures. This is resulting into hacking of bank account holder’s accounts and siphoning of their money.

Internet banking is a very important aspect of Indian banking industry. Internet banking not only provides instant banking facilities but it also confers mobility to the account holders. However, cyber security of internet banking infrastructure of India is the need of the hour. Instances of theft of money through hacking of accounts of the accounts holders are fast becoming a trend in India.

This is partly due to the ignorance of the accounts holders and partly due to the weak cyber laws of India. The account holders are increasingly targeted for phishing attacks that result in loosing of sensitive banking information.

According to Praveen Dalal, Managing Partner of Perry4Law and the leading Techno-Legal Expert of India, the Information Technology Act 2008 has made most of the cyber crimes and cyber offences “bailable”. India has made its cyberspace a “free zone” and “safe heaven” for cyber criminals and cyber offenders. He says that now even after committing hacking in India a person would be entitled to “bail” as a matter of right. There is nothing that prevents such cyber criminals from committing cyber crimes in India in the absence of a deterrent law.

This has resulted in an increased spate of cyber crimes including hacking of the e-mail IDs of the Internet banking users and stealing of their money.

Further, India has also become one of the most endemic surveillance societies of the World. Confidential information is already vulnerable and with the proposed Indian plans of installing key loggers at cyber cafes, the same would exclude the use of cyber cafes for these purposes. Although cyber caf├ęs are not a good place to transact confidential matters yet with a poor Internet penetration in India this may still happen, says Dalal.

With a weak cyber law, lack of cyber security awareness and increasing e-surveillance initiatives in India, Internet banking disputes are bound to increase in India. The government is least bothered about these issues and ultimately the account holders would have to bear the financial losses.