eWallets, Digital Payment Regulations Coming Soon; Rising Cyber Crime is the Reason!
During 2015-16, RBI reported 16,468 cases of cyber crime, which is a big increase from 12,317 a year earlier.
Demonetization gave a massive push to the digital economy in India – people started using mobile wallets, people who were scared to use ATMs started warming up to the concept of ecommerce, and suddenly there was a boom in total number of digital transactions happening all over the country.
But with this action, there was also a reaction – cybercrimes.
As per recent data available with Ministry of Electronics and Information Technology (MeITY), ever since demonetization kicked in, there has been an increase in the instances of cyber crimes as well.
And the increase is so substantial, that Govt. is now planning to create a special Digital Payments Act, for regulating e wallets and other modes of digital payments in the country.
Will regulation work?
Cybercrimes Increase Post Demonetization
As per studies conducted by RBI, Ministry of IT and National Crime Records Bureau (NCRB), it is clear that cybercrimes and frauds related with online transactions has increased, especially since November 2016, when demonetization kicked in.
Senior Home Ministry officials have revealed that 22.3 million online financial transactions happened before November 2016, which has increased by 23% as of May 2017.
At the same time, cyber crimes, such as fraud related with online payments, bank transfers and online shopping have also increased substantially. During 2015-16, RBI reported 16,468 cases of cyber crime, which is an increase from 12,317 a year earlier.
A senior official said, “While the government is enthused by the growth in digital payments and transactions, it acknowledges the higher risk of financial fraud it comes with. The challenges include password theft through fraudulent phone calls, e-wallet frauds, email spoofing and Phishing attacks, etc. We seek to prepare our law enforcement agencies to deal with the same,”
Regulation Of eWallets Is The Answer?
Ministry IT along with Ministry of Finance is now planning to create an exclusive set of regulations, which will focus only on cyber crimes. Digital Payments Act may soon be created, which will have all the regulations and protocols, which eWallets must comply with.
Besides, a strong force of 27, 500 police officers would be created, who are experts in forensic science, and cybercrime; a separate judicial task force of 13,000 officers would be also created, to tackle such cases of cybercrime.
A state level central nodal agency would control this task force, and take action against the culprits.
Govt. has asked the Ministries to create a special inter-ministerial committee, which will look into the legal aspects of forming such a Digital Payments Act.
Earlier, in 2015, Govt. had announced creation of a special team called IC4 to stop cybercrime incidents.
We will keep you updated as we receive more details.