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16th September 2021


The RBI has recently stated raising cases against financial frauds and cyber frauds. RBI includes important guidelines to improve customer protection and update the KYC verification process to prevent individuals and entities from financial crime. RBI Stated The usual modus operandi in such cases include receipt of unsolicited communication, such as calls, SMSs, emails, etc., by customer urging him/her to share certain personal details, account/login details/ card information, PIN, OTP, etc. or install some unauthorized/ unverified application for KYC updation using a link provided in the communication. Such communications are also reported to carry threats of account freeze/ block/closure.


According to the annual report of RBI (2020-21), the Department of Supervision (DoS) has mentioned that regulating entities should improve their risk assessment and strengthen the process of AML data collection of high-risk profiles and facilitate better risk discovery and risk-based supervision. 


According to RBI, an assessment based on risk scores and KYC/AML data should be developed and submitted to regulatory authorities. Regular on-site risk assessment should be conducted for every bank within a quarter to better detects frauds. These guidelines issued by RBI suggest every banking and financial service follow the regulatory rules to prevent the situation of financial fraud. 


Source: Good Returns

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