Bengaluru police, RBI and banks join hands to check bank frauds

It will become difficult for cybercriminals to dupe gullible victims in Bengaluru.

A complaint lodged with the police will immediately be alerted to banks and payment gateways who can stop the transaction mid-way.

Talking to Business Standard, Bengaluru Police commissioner Kamal Pant said this will drastically cut down the cybercrime incidents plaguing the country. While the system will shortly be launched in Bengaluru to start with and will be scaled up in Karnataka, a few other states have also expressed interest in the project.

This is how the whole system will work:

A fraud victim can call 112 or 100 to lodge a cyber crime incident report (CIR) with the police. A dedicated team of police officials will be on duty round the clock to receive such complaints. The bank’s back offices can work on these complaints, while a dedicated nodal officer can also get into the act during office timings. For example, the State Bank of India has dedicated a nodal office to respond to such frauds from morning 6 a.m. to 11 p.m. at night.

Once a CIR has been lodged, the police personnel will alert the concerned bank and payment gateway provider about the fraud. In each bank, there will be a team under a nodal officer to work on such information. The moment such a complaint is received by the bank from the police, they will get into the act and try to stop the transaction mid-way.

For example, if a credit card has been fraudulently used in an e-commerce site and the customer gets a transaction alert on her phone, she can quickly file a CIR that will stop the payment clearance midway. Even if it has been cleared, the e-commerce firm can deny sending the parcel and return the money to the customer.

“This system benefits everyone in the chain. The customer gets her money back, the bank doesn’t have to compensate for fraud, and the seller is also protected from shipping goods to a dubious person, which can be challenged in future. The Police also save a lot of time and effort in fighting these high-volume, low-value transactions that occur so frequently,” said Bengaluru Police Commissioner Pant.

According to Pant, while the fraudsters are located in certain pockets in some other states, it is not always possible to raid these outfits.

“Sometimes an entire village is engaged in this work. It is difficult to send a big police force to arrest one or two persons involved in a particular fraud incident. The entire village often gets in the way to prevent such arrests. A CIR, on the other hand, is a much easier process and can be done by a few dedicated personnel,” Pant said.

As per the Reserve Bank of India (RBI) rule, a bank is liable to refund the customer full money if the fraud is reported within 72 hours. However, for that, the person will have to alert the bank, and also file an FIR to submit to the bank. The bank, after going through its own due diligence, returns the money after 45 days.

A CIR, on the other hand, is hassle-free. Since the customer comes through the police channel, she doesn’t have to go through the FIR routine. An intimation from the police also works as a formal complaint with the bank, Pant said.

In pilots, the police have successfully resolved many such cases and now it can be formally launched to the wider public, he said.

However, not all banks and payment gateways were initially forthcoming in the process. That is where the RBI stepped in to bring all the banks into a common agreement.

“It is a question of mindset really. If everyone wants to come together it can be done easily. At the same time, it is also a responsibility on everybody’s part, including individuals who should be careful about the use of technology in banking,” said Pant.