Banks, Government of India, India, RBI

Explainer: RBI releases the ‘BE(A)WARE’ booklet listing the common modus operandi of online financial fraud


There has been a significant increase in the digital transactions & digital modes of payment in the recent years. Demonetization, movement restrictions during COVID-19 contributed significantly to this increase. The increase in transactions is also resulting in an increase in financial fraud through the online means. To help customers, the RBI recently released a ‘BE(A)WARE’ booklet listing the common modus operandi of fraudsters and the general precautions to be taken by customers.

In recent years, there has been a substantial increase in the usage of a digital or online medium for financial transactions. This was made possible with a combination of the availability of data & smartphones at lower prices, the introduction of easy & convenient modes of payments such as UPI & IMPS, and the explosion of payment apps. The ease & convenience of making such transactions has also contributed to this increase. 

Further, the government has been incentivizing multiple modes of digital transactions. In the aftermath of demonetization, the government had announced a slew of measures for the promotion of digital transactions. The government has recently approved an incentive scheme to promote RuPay Debit cards and low value [up to Rs. 2,000) BHIM-UPI transactions in the country. The scheme is aimed at reimbursing the merchant discount rate (MDR) to banks, which was brought down to zero in December 2019 for UPI transactions up to Rs. 2,000. 

Internet subscribers base more than tripled in 5 years and digital transactions increased 8 times in 6 years

According to the Telecom Regulatory Authority of India (TRAI), the total number of broadband subscribers (both wireless & wireline) in the country was 23.61 crore as of 31 December 2016 which went up to 79.21 crores as of 31 December 2021, a more than threefold increase in 5 years. Along with the increased penetration of the internet, demonetization of high denomination notes in 2016 and safety concerns & movement restrictions during the COVID-19 pandemic are two major events that have also contributed to the increase in digital transactions in the country. Since 2016-17, the volume of digital transactions in India has increased by around 8 times in six years. While 2016-17 witnessed only a total volume of 1,004 crore digital transactions, the number has reached 7,869 crores in 2021-22 with a few more days left for the year to complete, according to the government’s DigiDhan Dashboard

Rs. 4.5 crores worth frauds involving card/internet – debit cards, credit cards and internet banking were reported in two years

Though the speed and ease of transactions improved with digitization, the number of frauds reported in retail financial transactions is also increasing. Innovative methods are being employed by fraudsters to extract money from people, especially those who are not entirely familiar with the techno financial eco-system. In Scheduled Commercial Banks (SCBs), under the category of ‘frauds involving Card/Internet – Debit Cards, Credit Cards and Internet Banking’, a total of 73,552 cases of fraud involving Rs. 2.51 crores were reported in 2019-20 and 69,818 cases involving 2.07 crores were reported in 2020-21 as per data released by the RBI. The actual number might be higher due to underreporting, and this head does not cover all types of fraud. 

To tackle the increasing instances of fraud in digital transactions, the Reserve Bank of India (RBI) has issued guidelines/circulars from time to time advising banks to take measures to prevent frauds to ensure customer protection. Helplines, websites, etc. are also made available for customers to report unauthorized transactions. Apart from these, RBI also runs awareness campaigns on safe digital banking. 

RBI released a booklet on the common modus operandi used by fraudsters 

As part of the public awareness initiative by the Consumer Education and Protection Department, RBI, the country’s central bank recently released a booklet, “BE(A)WARE” on the common modus operandi used by fraudsters and precautions to be taken while carrying out various financial transactions. The booklet aims to increase public awareness about various types of financial fraud perpetrated on customers while carrying out digital payments and other financial transactions. The book has been divided into three parts- Part A and B list out the commonly observed modus operandi and precautions to be taken against fraudulent transactions relating to banks and non-banking financial companies (NBFCs), and Part C explains the general precautions and digital hygiene measures to be taken by the public. 

RBI has emphasized keeping one’s personal information confidential

Sharing of confidential information like username, password, card details, CVV and OTP by the customers, knowingly or unknowingly, was identified to be one of the major causes leading to the financial frauds, based on RBI’s analysis of complaints. Noting this, emphasis has been given on the need to always keep one’s personal information confidential, taking cognizance of unknown calls, emails, & messages, etc. 

The RBI’s booklet lists the following 14 different modus operandi used by fraudsters with respect to Banks.

  1. Phishing Links: Links of third-party phishing website which looks like an existing genuine website, like that of a bank, e-commerce website, or a search engine is made by fraudsters and circulated through SMS, social media, etc. 
  2. Vishing calls: People are approached through phone calls/social media by imposters who pose as bankers/executives/agents and trick them into revealing confidential information. 
  3. Online sales platforms: Fraudsters pretend to be defence personnel or buyers showing interest in the seller’s products and use the “request money” option through the UPI app instead of paying the seller. 
  4. Unknown/unverified mobile apps: Links of malicious apps are circulated so that customers end up downloading them on their PC or smartphone which gives access to the device including confidential details stored in it to fraudsters.
  5. ATM card skimming: Skimming devices, dummy keypads, pinhole cameras, etc. are installed in ATMs to get access to the ATM Pin and Card, so those duplicate ones can be created to extract money. 
  6. Remote access: Customers are tricked into downloading a screen-sharing app through which fraudsters control the customer’s device and gain access to their financial credentials.
  7. SIM swap / SIM cloning:  Access to the customer’s SIM Card or a duplicate SIM linked to their bank account is obtained to carry out unauthorized transactions.
  8. Compromising credentials on results through search engines: Contact details on search engines such as that of banks, insurance companies, or helpline numbers may be that of imposters and the customers may unknowingly reveal confidential details to them. 
  9. QR Code Scan Scam: Customers are contacted and tricked into scanning QR Codes through which fraudsters are authorized to withdraw money.
  10. Impersonation on social media: Fake accounts using details of the users of social media platforms are created to extract money from friends and family under fake pretexts.
  11. Juice jacking: Public phone charging ports may be used to transfer malware to customer phones connected there and access is gained to sensitive data in the customers’ device. 
  12. Lottery: Customers are sent emails or phone calls stating they won a huge lottery and are asked for bank account/credit card details on a website from which data is obtained by the fraudsters.
  13. Online job: Fake job search websites are created, and job seekers are asked to share confidential bank details for registration on the website.
  14. Money mules: People are duped by fraudsters into laundering illegal money via their bank accounts.

Modus operandi used by fraudsters in NBFCs have also been listed

The booklet also lists the modus operandi in the case of NBFCs. The common modus operandi used by fraudsters in the case of NBFCs are Fake advertisements for grant of loans by fraudsters, SMS/Email/Instant Messaging/Call scams, OTP based frauds, Fake loan websites or Apps, Money circulation/Ponzi/Multi-Level Marketing (MLM) scheme, and through loans with forged documents.

General precautionary measures should be taken by customers and depositors

The booklet also lists the general precautions to be taken by customers to avoid falling prey to these frauds. 

  • Keep an eye on suspicious-looking pop-ups that appear during your browsing sessions on the internet.
  • Check for a secure payment gateway (https:// – URL with a padlock symbol) before making online payments/transactions.
  • Do not save card details or passwords on websites or devices or share any such confidential details with others.
  • Do not click on unverified links.
  • Turn on two-factor authentication if such a facility is available.
  • Installation of antivirus on devices and regular installation of updates to fix bugs and scanning of USB devices before using.
  • Logging out of internet banking session immediately after usage.
  • Do not use public terminals for financial transactions.
  • Updating of passwords on a regular basis.
  • For depositors, verification of NBFCs, employees or agents, and their apps are recommended.

To file complaints on any such fraud, one may use the following contact details-

InstitutionContact details
RBI Ombudsman For filing complaints online: 
Physical form: CRPC, Reserve Bank of India, Central Vista, Sector -17, Chandigarh -160 017
Securities and Exchange Board of India (SEBI) 
Insurance Regulatory and Development Authority of India (IRDAI) 
National Housing Bank (NHB) 
Cyber Police Station 

About Author

A bachelor’s degree in mathematics and master’s in social science, she is driven by ardent desire to work with this unique combination to create her own path instead of following the herd. Having served a stint as the college union chairperson, she is a strategist who is also passionate about nature conservation, art and loves solving Sudoku.

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