Integration of Indian Banks with I4C to Combat Payment Frauds

Large Indian banks and payment firms like Razorpay and Cashfree are enhancing their fraud detection systems by directly integrating with the Integrated Cyber Crime Coordination Centre (I4C). This strategic move aims to facilitate instant action against payment frauds.

Current Challenges and Efforts

• Until now, banks received manual notifications when customers reported fraud, leading to delays.
• Financial fraud has significantly increased, with recovery of stolen funds proving challenging.
• Between 2019 and 2022, only 10% of stolen funds were blocked. In 2022, out of ₹2,294.8 crore stolen, merely ₹57 lakh was returned.

Technological Integration

• The new system will utilize an API (Application Programming Interface) to generate instant alerts, allowing for immediate account freezing.
• The finance ministry has set a deadline of January 31 for completing the integration with I4C.
• MeitY has affirmed that banks are working towards this integration, aiming to automate responses and reduce manpower costs.

Government Initiatives

• I4C is automating the response of banks and financial intermediaries through APIs to minimize response time on frauds.
• The integration involves NPCI (National Payments Corporation of India) for immediate UPI transaction responses.
• Efforts are underway to link the National Crime Records Portal with banks' Core Banking Systems to trace money trails and apply lien marking on disputed amounts.
• Fraudsters often use multiple mule accounts and obscure branches to siphon money, sometimes moving funds out of the country through Nepal and Bangladesh.