Latest news with #RBIH
Coin Geek
02-07-2025
- Business
- Coin Geek
Banks, RBI unite to launch digital fraud detection platform
Getting your Trinity Audio player ready... To address the growing threat of digital payment fraud in India, both public and private sector banks are collaborating to build the Digital Payment Intelligence Platform (DPIP), a part of the country's Digital Public Infrastructure (DPI), under the guidance of the Reserve Bank of India (RBI). Given the urgency of the matter for the federal government and the RBI, the platform is reportedly expected to go live in the coming months. The Reserve Bank Innovation Hub (RBIH) has been tasked with developing a prototype of the platform in coordination with 5 to 10 banks. This initiative will utilize cutting-edge technologies, including artificial intelligence (AI) and machine learning, to tackle fraud in the payment ecosystem. The effort follows just days after the RBI's annual report for FY2024–25 revealed a sharp rise in digital payment frauds, with 13,516 cases accounting for 56.5% of all reported banking frauds. However, frauds reported in a year could have occurred several years prior to the year of reporting. 'As digital payments continue to rise, the Reserve Bank's commitment to enhancing security, customer protection and fraud prevention will remain key priorities in 2025-26. The Digital Payments Intelligence Platform is being planned, which will leverage advanced technologies to curb payment related frauds,' the RBI said in its latest annual report. Once launched, DPIP will aggregate data from multiple channels to detect risks and combat digital fraud. Real-time information sharing will allow financial institutions to act quickly against emerging threats, thus ensuring safer digital transactions. This new platform will be designed to improve fraud risk management by enabling the real-time exchange and analysis of intelligence, allowing banks to detect and stop fraudulent transactions more effectively. The institutional setup of DPIP will involve contributions from a wide range of banks, recognizing that fraud is a shared concern across the financial sector. By incorporating AI-driven analytics and fostering instantaneous fraud intelligence sharing among banks, DPIP aims to detect abnormal behavior and suspicious activities early. This collaborative and technology-driven approach underscores India's commitment to securing its digital finance landscape, helping rebuild public trust, and strengthening the nation's position as a leader in safe digital transactions. The initiative comes after the RBI's annual report highlighted a sharp rise in banking fraud, with reported amounts nearly tripling to ₹36,014 crore (about $4.1 million) in FY25. Most incidents by volume occurred in the digital payment space (cards and internet), while the highest value frauds were reported in the lending (advances) segment. Digital payment frauds were the most frequent in private sector banks, while public sector banks saw the bulk of frauds in loan-related transactions. 'Frauds have occurred predominantly in the category of digital payments (card/internet) in terms of number and primarily in the loan portfolio (advances) in terms of value. While card/internet frauds contributed maximum to the number of frauds reported by private sector banks, frauds in public sector banks were mainly in loan portfolios,' RBI said in its annual report. Digital payment frauds surge despite RBI measures Despite RBI's proactive measures—including the adoption of cutting-edge technologies and initiatives such as aimed at identifying fraudulent accounts—digital payment fraud continues to rise at an alarming rate. While valuable, these sophisticated tools are struggling to keep pace with the evolving tactics cybercriminals use. As digital transactions grow in scale and complexity, fraudsters find new ways to exploit system loopholes, often targeting less regulated areas of the financial ecosystem. 'Digital payment frauds in India are surging due to sophisticated fraud techniques, such as AI-driven deepfakes and phishing, outpacing detection tools like [RBI's] Sharat Chandra, founder of EmpowerEdge Ventures and a startup enabler, told CoinGeek. 'The rapid growth of UPI transactions (₹200 trillion / $2.34 trillion) creates a vast attack surface, overwhelming systems. Many users lack financial literacy, falling for scams like fake QR codes or one-time-password sharing. Regulatory gaps, including delays in enforcing the Digital Personal Data Protection Act, and legal barriers to sharing fraudster data hinder prevention,' Chandra pointed out. Chandra noted that the lack of cohesive collaboration between banks, fintech companies, and regulators creates gaps that fraudsters can exploit, particularly through loosely regulated platforms such as over-the-top (OTT) services. The situation worsens when financial institutions focus more on rapid growth than on strengthening security measures. Chandra said that the key challenges include maintaining a seamless user experience while implementing strong security protocols, staying ahead of constantly evolving fraud techniques, and enabling real-time data sharing among all stakeholders. Continuous public education and stricter regulatory oversight are essential to combat fraud. 'The success of DPIP depends on seamless coordination among banks, fintechs, and other stakeholders. Past efforts to create shared databases have been stalled by legal and commercial issues, and similar challenges could delay or limit DPIP's effectiveness,' Chandra added. 1 in 5 UPI user families hit by fraud India's Unified Payments Interface (UPI), a real-time payment system that supports peer-to-peer and merchant transactions, has seen explosive growth in recent years. RBI's latest annual report states, 'During 2024-25, total digital payments recorded growth of 34.8% and 17.9% in volume and value terms, respectively. Moreover, the success of UPI placed India in a leadership position with a share of 48.5% in global real-time payments by volume.' However, a recent survey reportedly reveals that one in five households with a UPI user has faced fraud at least once in the past three years. This revelation comes amid a sharp rise in UPI transactions, which reached 185.8 billion in FY2024–25—a 41.7% jump from the previous year, now comprising 83.4% of India's total digital payment volume. Alarmingly, 51% of fraud victims did not report the incident to any authority—not the police, their bank, the UPI service provider, or regulatory bodies such as the National Payments Corporation of India (NPCI) or the RBI. This lack of reporting points to significant underrepresentation in official fraud data, suggesting that actual cases may be far higher. The survey, which collected over 32,000 responses from UPI users, also found that fraudsters are taking advantage of the rapid uptake of digital payments through a wide range of deceptive methods. Regulators fight back In response to the growing threat of digital payment fraud, the RBI, the National Payments Corporation of India (NPCI), and the Government of India have introduced a series of strategic initiatives to strengthen the security of the digital financial ecosystem. To enhance user trust and tackle phishing attempts, dedicated and secure domain extensions such as '. and '. are being rolled out. These exclusive domains are intended for authorized financial institutions, providing users with a trusted online environment and reducing the risk of impersonation or spoofed websites. In December 2024, the RBI introduced an advanced AI/ML-based tool specifically designed to identify and track mule accounts—bank accounts used as conduits for laundering money or conducting unauthorized transactions. On the public-facing side, the government has established the National Cybercrime Reporting Portal, along with a dedicated helpline number, 1930, to make it easier for individuals to report cases of digital fraud or suspicious activity. This initiative aims to improve fraud reporting rates and ensure victims have quick access to support and redressal mechanisms. NPCI—the central body responsible for overseeing retail payments and settlement systems in India—and the Institute for Development and Research in Banking Technology (IDRBT) have entered into an agreement to jointly enhance cybersecurity and resilience within India's digital payments infrastructure. Under this collaboration, both organizations will design and deliver specialized training programs aimed at technology and cybersecurity professionals working in the banking and digital payment sectors. These programs will address critical topics, including cybersecurity best practices, operational resilience, and data privacy, ensuring that professionals are equipped to meet evolving digital threats. 'Strengthening cyber resilience is not just about technology, but also about people and preparedness. Our partnership with IDRBT will enable structured capacity building across the ecosystem through training, certifications and sharing threat intelligence. This collaboration reinforces NPCI's commitment to proactive risk management and elevating security standards across digital payments,' said Dilip Asbe, MD and CEO of NPCI. A key outcome of the partnership will be creating a dedicated NPCI-certified payment security certification program tailored to current industry challenges and in line with regulatory expectations. This initiative aims to standardize and elevate security expertise across the payments ecosystem. Additionally, IDRBT will provide its advanced threat intelligence service to NPCI and its partners. This will enable real-time sharing of threat data, helping institutions within the NPCI network proactively defend against cyber threats and strengthen the overall security posture of the digital payments landscape. Together, these efforts represent a multi-pronged approach to securing India's digital payments landscape, combining technology, regulatory oversight, and public engagement to mitigate fraud and protect users. Watch: 'Disruptive' blockchain can be useful for India title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Mint
28-05-2025
- Business
- Mint
What's cooking inside RBI's Bengaluru innovation hub?
Mumbai: Chaarmikha Nagalla, 24, believes in the power of bringing ideas to life. So when it came to choosing a career, this economics and computer science graduate from Chennai was clear she wanted a job where she could make an impact. After cold mailing over a dozen people on LinkedIn every day, Nagalla got lucky with a job at the newly created Reserve Bank Innovation Hub (RBIH) in Bengaluru. But she wasn't sure about the role. An event on financial inclusion organized by the hub, where founders of fintech startups participated, firmed up her mind. Fifteen months on, she is facilitating multiple such events for RBIH across India. 'If we can help bring someone's vision to life, there's nothing more fulfilling," said Nagalla. This is the underlying mission of the innovation hub, set up by the Reserve Bank of India (RBI), India's central bank. Established on 24 March 2022, four years after Shaktikanta Das took charge as the RBI governor, RBIH started with the aim of bringing innovation to the financial sector, as well as boosting financial inclusion. The idea was also to act as an interface between the central bank and fintechs. The move was significant considering that RBI was not really viewed as a 'friendly" institution by many fintechs at that point in time. Mint, in a story titled 'Why new-age fintechs fear death by a thousand circulars', narrated the tale of many companies that found themselves in the grip of new regulation; some were forced to pivot or slow down. RBI, on its part, was worried about data privacy, cyber security, unethical behaviour, lack of compliance and potential money laundering by the fintechs. Startup @ HSR Layout RBIH was set up based on the recommendation from the Bank for International Settlements (BIS), which runs six such hubs across the world. BIS is an international financial institution owned by member central banks with a goal to foster international monetary and financial cooperation. However, RBIH is a tad different—it is run by RBI, not BIS. To run the centre, RBI roped in Rajesh Bansal, a former central banker and one of the founding members of Aadhaar, now the world's largest biometric identification system. Bansal had worked at RBI for over 17 years, in areas ranging from technology, financial inclusion and payment systems. At the Unique Identity Authority of India (UIDAI), the body which issues Aadhaar, he was responsible for designing India's direct benefits transfer system. 'When I took charge in May 2021, RBIH was truly in its start-up phase. I received an appointment letter, but there was no office—nothing at all," Bansal told Mint during an interview in December last year. The executive recently stepped down from RBIH. After much debate, the board decided to set up its first office in Bengaluru. RBIH's board has illustrious names, including Kris Gopalakrishnan, the former CEO of Infosys, Gopal Srinivasan, the chairman and managing director of TVS Capital, and Ashok Jhunjhunwala, an academic known for his work around industry-academia partnerships as well as innovation. The Karnataka government offered space in a building owned by the Karnataka State Electronics Development Corporation Limited at HSR Layout, home to many startups. Unlike the typical RBI offices, which are adorned with large wooden panels and doors, the RBIH office wears a more contemporary and vibrant look. Bansal and his core team worked out of this office. A 60 member engineering team is based in a different building, a few blocks away. The data in milk One of RBIH's initial projects was around agri-finance in India. It chose the Kisan Credit Card (KCC) scheme, which is the primary mode of financing agricultural working capital loans. In October 2021, a team from the hub reached out to banks and visited Chamrajnagar district in Karnataka to conduct a field study. After several visits, which spanned over a month, the team observed that it could take three to four weeks for a farmer to access a loan. This delay was largely due to manual processes, extensive paper documentation, and the need for multiple visits to the bank. 'We realized that the entire process boiled down to nine API (application programming interface) calls," said Bansal. 'So, I gave the team a challenge: Let's make it happen in five minutes." In August 2022, RBIH, along with the Federal Bank, conducted the first KCC transaction in less than five minutes. RBIH did a similar project on cattle loans, where it aimed at leveraging milk-pouring data from cattle farmers. In India, most farmers are part of milk-pouring societies, which are often linked to larger federations like Amul. Farmers deliver their milk daily to these societies and receive payments, either in cash or digitally. These societies maintain records of their contributions—data spanning five or even 10 years. This data could provide valuable insights into a farmer's cash flow, significantly improving the loan underwriting process, RBIH realized. A pilot project was run with a large private bank, enabling access to Amul's milk-pouring data. This allowed the bank to underwrite loans more effectively, resulting in a drastic reduction of time required to process loans—from four-six weeks to just a few minutes. The process also became entirely paperless, marking a significant improvement in efficiency. Based on insights from the two projects mentioned above, RBIH designed and developed the first digital public infrastructure (DPI) for credit called the Public Tech Platform for Frictionless Credit (PTPFC). This platform today facilitates banks to access authenticated data from central and state governments. Given that RBIH is a non-profit company, it gets an annual funding from RBI. According to its annual report for fiscal year 2023-24, it incurred an expenditure of ₹2.1 crore on developing the public tech platform, which was later reimbursed by the central bank. A new trinity is born Soon, RBIH realised the potential of scaling up PTPFC and thus was born the Uniform Lending Interface (ULI). On 26 August 2024, a year after it launched the pilot version of PTPFC, former governor Shaktikanta Das unveiled ULI at the RBI@90 Global Conference in Bengaluru. 'RBIH is on the verge of a major breakthrough with the creation of ULI. This new platform has the potential to become a foundational public digital infrastructure for India, much like UPI did for payments," said a board member who didn't want to be identified. 'ULI is designed to bring together all the information needed for loan underwriting—including KYC details and possibly even account aggregator—into a single, standardized interface. By streamlining access to financial and non-financial data from various sources, ULI aims to make the lending process faster," he added. Bansal explained that the focus isn't on large loans, like ₹5 crore. Those are already being addressed by the market. 'Our focus is on those whom the market isn't serving. That's where public policy plays a role." Kuldeep Gautam, 30, is a government school teacher in Madhya Pradesh. He took to farming four years ago. Last year, he took a loan of ₹50,000 for the first time, from Union Bank's Kothi branch in the state's Satna district—he bought seeds and other materials needed for farming. Gautam said that he had to visit the bank only twice to get the loan—once to enquire about the loan and the second time to submit his original documents. 'Everything was digital this time. I got my loan sanctioned in two-three days," he said. This is a big change from the time his father used to avail of KCC loans, when everything was offline; loans would take at least a month to be disbursed, he recollected. RBIH next expanded beyond KCC and dairy farmers; it worked with banks to digitize the lending journeys of education, home as well as business loans. It also enabled the integration of banks with all credit bureaus—currently, most banks are integrated with only one credit bureau. As of now, RBIH claims that 36 lenders and 50 technical service providers are currently live on the ULI platform. Both RBI and RBIH are betting that the new trinity of JAM-UPI-ULI will be a 'revolutionary step" forward in India's digital infrastructure journey JAM is short for Jan Dhan accounts, Aadhaar cards and mobile numbers while UPI is unified payments interface, the popular instant payment system developed by the National Payments Corporation of India (NPCI). Fraud catcher RBIH is trying to solve yet another modern-day problem—mule accounts. These are bank accounts used by criminals to launder illicit funds. They are often set up by unsuspecting individuals lured by promises of easy money or coerced into participation. Through an artificial intelligence-based model called MuleHunter, the innovation hub is trying to identify such accounts more effectively. After consultations with bankers, RBIH realized that banks were relying on a 'business rule engine' method to detect mule accounts. These systems operate on predefined rules—if a certain set of conditions are met, the account is flagged as a suspected mule account. This approach, while useful, has its limitations. The tool RBIH developed uses 19 distinct behavioural patterns associated with mule accounts to spot suspicious activities in real time. Some of these patterns include a customer opening a zero balance account with the help of a business correspondent; an account suddenly seeing high volume transactions after remaining dormant for many days; a customer transacting ₹50,000 or more when the stated income is ₹2 lakh. While RBIH says it is currently testing the system with two public sector banks, most large private banks remain circumspect about using MuleHunter. They already have invested in tools that can tackle such accounts. 'We already have a model which is doing quite well," a private banker reasoned. 'But we can adapt any feature from the MuleHunter that we don't have." The matchmaker RBIH, meanwhile, set up a 'FinTech and Startups Accelerator'. It brings together startups, regulators, incubators, investors, banks and other financial institutions with a singular aim— fast track innovation and financial inclusion. Accelerator programmes are part of this plan. Impactsure Technologies is one fintech that says it benefited from such a programme. The company builds artificial intelligence-powered document analytics solutions for banks and financial services companies. Chief executive officer Dharmarajan Sankara Subrahmanian said that after attending a fintech accelerator programme, the company now works with 10 banks; it used to be two earlier. With RBIH's help, things just got done faster. The hub also wants to be a bridge between the central bank and fintechs, a relationship that runs low on trust. It is helping RBI officials host monthly meetings with startups in different cities. 'You need someone who is constantly in touch with the (fintech) ecosystem, can talk their language, can communicate more openly with them," Rabi Sankar, deputy governor at RBI, told Mint. Through the innovation hub, the idea is to communicate the central bank's priorities. 'And the fintech ecosystem can communicate its requirements, its concerns to the RBI," Sankar added. For the Global South So, what can we expect from RBIH, going ahead? With Bansal stepping down, strategic changes in the hub's direction cannot be ruled out. Rakesh Ranjan, the centre's chief digital officer, is the acting CEO as of now. Some bankers do question the role of RBI in running an innovation hub—shouldn't the central bank simply be a facilitator and leave innovation to the private sector? 'The regulator running a lending platform is an idea whose time is yet to come," said G. Padmanabhan, former executive director, RBI. 'If at all necessary, which I'm not sure about, it is best managed by a trusted third party owned by lending entities," he added. Some point to initiatives like the MuleHunter. RBIH, here, is trying to compete with fintechs, who have better access to both data and technology. But in the minds of many RBI officials and Bansal, the former CEO, the vision for the hub is clear. They want RBIH to be recognised as the innovation hub of the Global South. India needs 100,000 fintechs to serve over 1.5 billion adults by 2047, the hub believes. 'There is a clear need for hyper-local fintechs across the country that can create financial products tailored for women, especially in regions like Jharkhand and Chhattisgarh," Bansal said. RBIH sees a crucial role for itself here, a goal that has inspired employees like Chaarmikha Nagalla to keep going.
Business Standard
13-05-2025
- Business
- Business Standard
SPJIMR WISE Tech hosts Demo Day for inaugural Frictionless Finance Accelerator cohort
PRNewswire Mumbai (Maharashtra) [India], May 13: Bharatiya Vidya Bhavan's S.P. Jain Institute of Management & Research's (SPJIMR) WISE Tech hosted a 'Demo Day' for the inaugural cohort of the Frictionless Finance Accelerator on Wednesday, May 7, at its Mumbai campus. In collaboration with the Reserve Bank Innovation Hub (RBIH) and YES BANK, it marked the culmination of a four-month long journey to support 15 high-impact fintech start-ups working to reshape India's financial services landscape. The Demo Day brought together over 50 investors and venture capitalists, along with 13 financial institutions, to witness the innovative solutions developed by the cohort. The event also featured a fireside chat with Madhusudanan R, Founder of M2P Fintech, followed by an engaging 'Ask Me Anything' session. "WISE Tech was launched to spark purpose-driven innovation. Through the Frictionless Finance Accelerator, we've demonstrated how academia, industry, and institutions such as RBIH can co-create meaningful change in the sector," said Manoj Mohan, Executive Director, SPJIMR WISE Tech. Fifteen innovative start-ups, selected from over 150 applications, are addressing key challenges across diverse financial sectors such as agri-finance, climate finance, MSME finance, Nano entrepreneurship, retail finance, and supply chain finance. Their solutions include AI-driven tools, ESG assessments, digital lending, and inclusive financing models, reflecting the evolving landscape of India's financial ecosystem. Launched on National Startup Day, the Frictionless Finance Accelerator aims to foster innovation and inclusion in financial services by helping fintechs become more bank-ready, responsible, and resilient. RBIH connected start-ups with domain experts, industry leaders, banks and financial institutions, and investors--building bridges between innovators and enablers in the financial ecosystem. YES BANK played a pivotal role by engaging its internal business teams to explore collaboration opportunities with the start-ups. This included advisory inputs and discussions for potential Proof of Concept (PoC) engagements across lending, payments, and ecosystem banking--validating ideas in real-world scenarios and reinforcing its commitment to collaborative innovation. SPJIMR, through WISE Tech, focused on the design and delivery of the Accelerator. Start-ups benefited from nine targeted masterclasses and deep-dive mentoring by industry experts, including Santosh Kumar, Director, SPJIMR WISE Tech. SPJIMR also facilitated curated access to a broader ecosystem of banks, institutions, and potential partners. YES BANK 's participation in the Frictionless Finance Accelerator reflects its belief in the value of collaboration between banks and fintech start-ups to drive inclusive financial growth. The initiative aligns with the Bank's focus on encouraging innovation, advancing financial inclusion, and enabling a seamless digital banking experience. As part of the programme, YES BANK conducted one-on-one mentoring sessions with participating start-ups--assessing their business models, growth plans, and banking needs. This enabled the Bank to provide targeted advisory support and explore relevant product-market fit opportunities. "As a bank committed to driving digital innovation, YES BANK sees fintech collaboration as integral to shaping the future of financial services," said Dr. Rajan Pental, Executive Director, YES BANK. "By combining our domain expertise with the agility of fintechs, we are co-developing solutions that can enhance access, efficiency, and scalability across the financial ecosystem," he added. The Demo Day concluded with a formal graduation ceremony honouring the cohort and special recognition of the Top 3 pitches. Participants and stakeholders continued their interactions during post-event networking and speed-meetings, opening doors for new collaborations and funding opportunities. The success of the inaugural cohort sets the stage for future editions of the Accelerator and reaffirms SPJIMR's commitment to shaping a seamless, inclusive, and sustainable financial ecosystem in India. About RBIH: The Reserve Bank Innovation Hub (RBIH) is a wholly-owned subsidiary of the Reserve Bank of India, dedicated to leveraging technology and innovation to enable frictionless finance for a billion Indians. The RBIH works towards this mission through its four pathways: RBIH Build - developing in-house solutions when market solutions do not exist, RBIH Design - designing customer-centric processes and products, RBIH Incubate - nurturing fintech startups and the innovation ecosystem, and RBIH Insights - conducting in-depth research and analysis to shape financial innovation. By building bridges between various stakeholders in the financial ecosystem, RBIH fosters an environment of collaborative innovation to drive financial inclusion. About YES BANK: YES BANK is a full-service commercial bank providing a complete range of products, services, and technology-driven digital offerings, catering to retail, MSME, and corporate clients. YES BANK operates its investment banking, merchant banking, and brokerage businesses through YES SECURITIES, a wholly-owned subsidiary of the Bank. Headquartered in Mumbai, it has a Pan-India presence including an IBU at GIFT City and a Representative Office in Abu Dhabi. For more information, please visit the Bank's website at About SPJIMR: Bharatiya Vidya Bhavan's S.P. Jain Institute of Management and Research (SPJIMR) is a leading postgraduate management institute, recognised by the Financial Times MiM Global Rankings as India's #1 business school, by Business Today as one of the country's top five business schools, and by the Positive Impact Rating as one of the top five business schools worldwide for societal impact. Known for its innovative and socially conscious approach to management education, research, and community engagement, SPJIMR aims to influence managerial practice and promote the value-based growth of its students, alumni, organisations and their leaders, and society. SPJIMR holds the international 'triple crown' of accreditations from EQUIS, AACSB, and AMBA.
