Digital frauds rising since July; digital Infrastructure may able to contain, says DG T Rabi Sankar

T Rabi Sankar

The digital frauds per number of transactions have started increasing after July, but the Reserve Bank of India (RBI) is optimistic that it will be contained with the current digital infrastructure, said Deputy Governor T Rabi Sankar on November 7.

"If you look at frauds per number of transactions, we would see that, compared to last year, from the beginning of the year the incidents kept on, you know, reducing substantially, until about July, when it again started rising," Sankar said during the address at the 12th SBI Banking and Economics Conclave in Mumbai.

Sankar said that we can use technology to prevent frauds, but fraudsters can use technology to perpetrate frauds.

"This is a continuing exercise we do, but we have to ensure that the incidence of such events is not so much that it affects the trust of the average person," he added.

On October 1, RBI Governor Sanjay Malhotra, during the post-policy conference, had said that the central bank is implementing a new “Digital Payments Intelligence Platform” that will leverage artificial intelligence to identify potentially risky transactions before they are completed.

Sankar also said that digital currencies can provide a superior alternative to banks in cross-border payments.

"Even with CBDCs, the banking business is likely to change significantly, and these impacts need to be understood by banks," he added.

He said that our thinking has always been very clear that stablecoins pose a risk, and the same functions can be done by CBDCs if they are interconnected.

Further, he said that banks need to treat fintechs as partners in innovation and create mutually beneficial and symbiotic strategic partnerships with this ecosystem.