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    Finance Ministry hosts workshop with Law Enforcement Agencies (LEAs), Start-ups and Fintech companies to address digital financial fraud

    The Department of Financial Services (DFS) on April 30 held a workshop for Law Enforcement Agencies (LEAs), Start-ups, and Fintech ecosystem partners in New Delhi. The workshop, organized in partnership with the Ministry of Finance, Indian Cyber Crime Coordination Centre (I4C), and the Ministry of Home Affairs, aimed to address key challenges in cybersecurity and tackling digital financial fraud. The workshop was in continuation of a previous meeting of Start-ups and Fintech companies with Union Finance Minister Nirmala Sitharaman, said the Finance Ministry in a press release.

    Speaking at the workshop, DFS Secretary Dr. Vivek Joshi urged for greater collaboration among the government, regulator, public and private sector to harness the full potential of the Start-up and Fintech sector in India. While Fintech Associations presented the key challenges faced by the Fintech companies, the LEAs from the states shared their best practices on curbing cybercrime and financial fraud. It was emphasized that an indigenous transaction monitoring and Anti-Money Laundering (AML) system catering to Indian fraud and crime scenarios may be developed by the Fintech companies.

    Additionally. India Cybercrime Coordination Centre highlighted its Citizen Financial Cyber Frauds Reporting and Management System (CFCFRMS) created to tackle the prevalence of digital fraud.

    Who attended the workshop?

    Heads of around 60 Fintech companies, 4 Fintech Associations, Police Departments of 23 states, CBI, ED, FIU-India, Ministry of Electronics and Information Technology (MeitY), Department of Telecommunications (DoT), Department for Promotion of Industry and Internal Trade (DPIIT), Reserve Bank of India (RBI), Pension Fund Regulatory and Development Authority (PFRDA), Central Registry of Securitisation Asset Reconstruction and Security Interest (CERSAI), National Payments Corporation of India (NPCI), Business Correspondent Federation of India (BCFI), and India Cybercrime Coordination Centre etc.

    Points discussed in the workshop

    • Role of technology in providing accessibility to financial services
    • Devising a mechanism to ensure data privacy and prevention of data theft
    • Real-time monitoring of data infringement by both the Fintech companies and LEAs
    • Strategy to control the money mules :A money mule is an individual who is being duped by fraudsters to launder their illegal or stolen money through their bank account. This was one of the many cybercrimes pointed out by the report by the Parliament Standing Committee on Finance entitled  ‘Cybersecurity and Rising Incidence of Cyber/White Collar Crimes in India’.
    • Appointment of key contact point or nodal officer by the Fintech companies to liaise with the LEAs :The appointment of a nodal officer was also discussed at the meeting last year. Appointing a nodal officer was a recommendation made by Parliamentary Standing Committee on Communications and Information Technology.
    • Geotagging of digital transactions to track the money trails: This was likely introduced in order to address the concerns around virtual accounts being used to mask the trail of money, as pointed out previously by the Parliamentary panel. Geotagging allows for verification of the validity of the user.
    • Creation of suspicious registry of BCs and fraudsters involved in the financial frauds: The Parliamentary Committee had recommended the establishment of a Central Negative Registry, which should be maintained by the Cyber Protection Authority (CPA) to consolidate information on fraudsters’ accounts and empower law enforcement and fintech entities to beware of repeat offenders.
    • Conducting regular audits of digital KYC for fostering trust and accountability: The Committee had also recommended strengthening KYC verification to prevent financial fraud.
    • Establishing a mechanism for freezing and unfreezing of accounts for faster recovery of defrauded money: The Parliamentary Committee had previously noted the high turnaround time to close complaints lodged by victims of fraud. They also noted that the victim’s money is only refunded through a court order. Thus, streamlining the process of recovery of defrauded money is a major priority.
    • Modernisation of digital infrastructure by leveraging technologies like IPv6, API integration etc: The Parliamentary Committe had noted a lacking digital infrastructure, particularly in government system, making them extremely vulnerable to cybersecurity breaches. Thus, the need to strengthen digital infrastructure is a priority in order to tackle cybercrime.

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    The post Finance Ministry hosts workshop with Law Enforcement Agencies (LEAs), Start-ups and Fintech companies to address digital financial fraud appeared first on MediaNama.

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