Op-Ed: Secured Banking Holds the Key to Cashless Society

Indian society is fast moving towards the ambit of cashless society where people are fast yet steadily showing their interest to go cashless. More and more accounts are getting opened and online accounts are generated with unique four digit passwords. People are surely turning up for something which neither they are secured or comfortable to begin with.

As Indians are comfortably placed in taking money and going to market for shopping, certainly they are finding this new system a bit worry and irksome. Now the great Indian middle class is dueling with the idea of having an ATM and remembering the so called safe and secured password. The struggle to memories the password and use it safely continues among young and aged alike and in between the news of internet frauds instills more fear among them. Unless and until a secured banking practice and process is put in place, people who are newly joining this banking mainstream are most likely to remain aloof to the ‘go cashless’ mantra.

Data obtained from the Reserve Bank of India (RBI) indicates that a manifold increase is noticed in internet banking, credit and debit cards in India. Between 2012-13 and 2015-16, a 35% increase has been noticed, according to RBI. According to RBI data, 8,765 cases were reported by banks in 2012-13 and the corresponding figures for subsequent three years were 9,500 (2013-14), 13,083 (2014-15) and 11,997 (in the first nine months of 2015-16) respectively. Globally, India ranks third behind Japan and United States as countries more affected by internet based financial frauds.

Lack of understanding of banking system operation, illiteracy, greed to earn, responding to fraud calls of the bank like agencies as well as  inability to maintain the secrecy of the passwords are few of the major reasons because of which such mal practices offer. But the irony is that even if consumer awareness campaigns are organized by banks and other civil society forums, yet the number has kept on increasing with every passing year. Very recently it is reported that 32 lakh ATM and Debits cards’ security has been compromised, which is strong enough to raise doubts on the ability of the banking system to provide a safe as well as secured banking ecosystem to the clients.

Maheswar Mohanty, a senior citizen of Arunodaya Nagar, Cuttack, had met with a banking fraud in 2013. He was clueless when Rs 40,000 cash was withdrawn from an ATM in Cuttack from his lost ATM card. “I went to two police stations and after few rounds of discussion, the FIR was finally lodged. I was also invited to the police station further when police obtained the CCTV footage from banks. But nothing substantial was proved. “I did not get my money back,” he said. The case certainly pointed out that even after cases are reported to police, the accountholder hardly gets his money back in quick times. Reports also flood that a nexus exist in some banks between bank employees and hackers. Identifying these criminals indulged in internet frauds and bringing them to the books takes years together. Again in many cases, the offender runs the internet crime network siting at the other side of the shore making it almost impossible to bring him/her to the books. The case is so complex that it requires intervention of many actors.

Now, after demonetization happening, an altogether new group of people are creeping into the banking system. It will be a challenge to provide them secured and safe banking system as most of them will be belonging to marginalized socio-economic set up and have never accessed to banks earlier. Ensuring to retain their trust in banking system would be the key to make the society a cashless one.

An ASSOCHAM Mahindra SSG study points out that most of the hackers belonged to 18-30 age group and around 12,456 cases are reported every month in India across every sector.

Now while the Government has geared up to promote cashless society by encouraging people to make payment through electronic gateway, credit cards and debit cards, hackers as well as phishers will be tempting to make most of the opportunities. As more and more marginalized people with little knowledge on e- banking system will enter the fray, the onus lies with the government agencies to promote safe and secured banking.

(DISCLAIMER: This is an opinion piece. The views expressed are author’s own and have nothing to do with OTV's charter or views. OTV does not assume any responsibility or liability for the same.)