NPCI tightens security as criminals target ATMs, e-banking

The recent arrest of a Romanian national in Mumbai in connection with fraudulent cash withdrawals at ATMs in Kerala’s capital Thiruvananthapuram has brought the issue of card security into focus even as more Indians use credit, debit and ATM cards to either pay for goods and services or withdraw cash.

Separately, the Reserve Bank of India (RBI) on Thursday sought comments from the public on its draft circular on ‘Customer Protection — Limiting Liability of Customers in Unauthorised Electronic Banking Transactions’ in the backdrop of a rise in cases of online banking frauds.

Criminals can capture data on the card’s magnetic strip using electronic devices (a process known as skimming) and then use that information to make fake cards that are used to defraud the card holder and card issuer.

The remaining 40 per cent of cards have been migrated to the secure chip-based EMV (Europay, MasterCard, Visa) format. According to an RBI directive, all old magnetic strip cards issued by banks will have to migrate to EMV by December 2018.

In case skimming occurs at an ATM, all card issuers have the capability to detect the fraud through point of compromise analysis. All such companies have solutions and support banks to deal with such situations.

For instance if two transactions take place at two different places which are located at a distance, then the card companies alert the banks immediately. If a card is used more than 30 times in a day, it is blocked automatically at the 31st transaction. After the 10th transaction, the banks alert the customer.

In order to prevent fraud at its ATMs, Axis Bank lays emphasis on monitoring the ATM counters. According to Sanjay Silas, president and head-branch banking at Axis Bank, the lender has a system of e-surveillance which helps prevent frauds.

“We saw a person entering the ATM with a screw driver and a small packet…and a team was sent to the spot,” said Mr. Silas. Highlighting the importance of constant monitoring, Mr. Silas said Axis Bank has a back-end unit which keeps monitoring transactions at various ATMs.

The chances of skimming are less in ATMs that operate dip card reading machines as compared to machines that retain the card during the transactions, Mr. Silas said. Axis Bank had moved to dip card reading machines since 2012-13, he said.

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Source:Thehindu