Banking system is one of the systems which have not only survived the test of time but have also successfully adopted technology to enhance its reach and services. In fact, no industry has been so versatile as Banking in the adaption to technology. Banking is one of the oldest and growing sectors. Banking is a global industry and irrespective of the state of development of the country, it remains the financial backbone.

The primary function of banks is acceptance of deposits and maintenance of accounts however in India banks are free to create innovative deposit products within the guidelines framed by the Reserve Bank of India. Traditionally, banking was a once-a-month activity because Banks were mostly used as a safe wallet and approached only when in need of money. This approach has been drastically changed with blend of Banking with technology. The combination of Banking with technology is often referred as ebanking or Electronic Banking has now occupied vital part of human transaction.[i]

E-banking In India

The various Committees[ii] have made a landmark contribution and reforms in the growth and development of Banking in India. Some of the Committees like Committees on Communication Network for Banks and SWIFT implementation (1987)[iii] and Committee on Computerization in Banks (1988)[iv] are some of the Committees we led Banks towards digital footprints.

ATM�s has reduced the dependency of customer on Banks but the larger change in banking sector was achieved through internet banking and mobile banking apps or UPI payment apps. Internet banking enhanced availability of service and banking apps/UPI payment apps empowered transfer of payments and eased day to day purchase transaction. UPI Payment apps have become common, easy, fast and necessary. Today debit cards have occupied ceremonial place in the wallet as banking apps/UPI payment apps are becoming more popular choice of payment.

Cybercrime

Payment apps have removed the dependency of common man on banks[v] and at a one click, a person can make financial transactions. The uniqueness of payment apps is that it has simplified the payment process to such a level that even a person without formal education can make use of it. As payment apps have become more common and simple, it attracted the attention of fraudster.

Cybercrime can be defined as a crime committed with the use of an electronic device like computer or mobile phone or where a computer or mobile phone is a target, so cybercrime can be defined as an activity where electronic device is used as a tool or target to commit crime.

Cybercrime in India is at a cautious point as India ranks among the top ten in cybercrime which is both alarming and matter of concern. According to the Indian Cyber Crime Coordination Centre (I4C), in May 2024 on an average 7000 cybercrime complaints were registered per day which is a manifold increase from previous year.[vi] This trend shows a growing pattern of cybercrime. The majority of the crime reported were related to online financial frauds.

Phishing Crime

A phishing crime is a process or an attempt of deceiving people by gaining personal information especially financial information. As on 2023, India ranked third globally for phishing attacks and two major industries, Finance and Insurance were the prime target. Thus, financial crime occupies a major part of cybercrime in individual and industry level. According to a report, a total of 1.13 million cases of financial crimes were reported in 2023 which involved amount of Rs 7,488.6 crore. According to a report citing, Reserve Bank of India there is an increase in the Digital payment frauds which is almost five times in the period that ended in March 2024 in comparison to same period last year.

Legal Provisions under Information Technology Act, 2000
Section 43 of the Information Technology Act, 2000
Section 43 provides provision for penalty and compensation in case of unauthorized access or hacking

Unauthorized access means to get access without permission or consent or to get control of a device or its data without authorization or approval of the owner or person in charge. The most important element in this section is that, actual damage or loss is irrelevant and access without permission itself can become offense which is similar to trespass of land where actual damage is immaterial. Installing of spyware, key loggers or use remote access app or tool is common method used by hackers to steal confidential information especially financial information.

If a person copies or downloads information or causes damage to computer or computer network it will amount to offense under section 43 of the Information Technology Act, 2000. Denial of access[vii] and deletion or alteration is also an offence under the Section 43 of the Information Technology Act, 2000.

Section 66C of the Information Technology Act, 2000
Punishment for identity theft
A person has committed an offense under section 66C of the Information Technology Act, 2000 if he fraudulently or dishonestly uses another person�s,

1. Electronic signature
2. Password
3. Any other unique identification feature

This section clearly prohibits fraudulent or dishonest use of password thus any software, mobile app or computer application which may be financial or non-financial which is secured by a password is protected under section 66C of the Information Technology Act, 2000. Any other unique identification feature is a wide term which means things which provides unique identification to a person. For example, Email, social media handles etc.

66D Punishment for cheating by personation by using computer resource
Personation means pretending to be someone who in reality is not with the intention to deceive or cheat. If a person cheats by personation by means of any electronic device like mobile or computer, he is committing offence under section 66D of the Information Technology Act, 2000.

Conclusion
The most common method of Phishing crime is obtaining confidential or financial information like bank details or password through personation. Another popular method is luring to participate in fake schemes like fake lottery, fake share investment schemes etc. It is possible to avoid traps of scammers by excising precautionary steps like non-disclosure of financial information, avoiding entering banking details in unauthorized websites, avoid installing remote access apps from unknown callers.

Some of the recent scams like fake parcel scams and digital arrest scams are creating havoc and innocent people are becoming victim losing not only money but facing mental trauma. Government has taken commendable initiative by providing online complainant mechanism in case of cybercrime.[viii] Awareness of cybercrime is the most important pillar in stopping cybercrime.

End-Notes:

1. https://www.ssoar.info/ssoar/bitstream/handle/document/49671/ssoar-2015-3-kolekar-ebanking_in_India.pdf?sequence=1
2. https://www.rbi.org.in/scripts/PublicationsView.aspx?id=162
3. Headed by Chairman Shri T.N.A.Iyer
4. Headed by Chairman Dr. C. Rangarajan
5. Visit to bank for transfer or payment of money
6. https://economictimes.indiatimes.com/tech/technology/india-ranks-number-10-in-cybercrime-study-finds/articleshow/109223208.cms?from=mdr
7. Like Ransomware, Distributed Denial-of-Service (DDoS) Attack
8. https://cybercrime.gov.in/

Written By: Yogesh Prasad Kolekar Asst Professor M.K.E.S College of Law, Mumbai