RBI to launch Digital Payments Intelligence Platform for fraud prevention

The central bank’s income from foreign source was up 23.2 percent YoY at Rs 1.87 lakh crore in FY24, while its domestic net income stood at Rs 88,100 crore, up 5.7 percent YoY. 

The Reserve Bank of India plans to set up a Digital Payments Intelligence Platform to reduce payment frauds. A committee led by Shri A.P. Hota has been formed to provide recommendations within two months.

RBI has proposed setting up a Digital Payments Intelligence Platform. This platform will leverage advanced technologies to mitigate payment fraud risks in India.

To advance this initiative, the RBI has formed a committee, chaired by Shri A.P. Hota, former MD & CEO of NPCI. The committee will examine various aspects of establishing this digital public infrastructure and is expected to provide recommendations within two months.

The central bank claimed that over the years, the Reserve Bank of India (RBI) has implemented several measures to ensure the safety and security of digital payments. These efforts aim to maintain public confidence in digital payment systems. A key aspect of sustaining this confidence is minimizing fraud.

Many digital payment frauds occur by tricking unsuspecting users into making payments or sharing their credentials. While the payment ecosystem—including banks, the National Payments Corporation of India (NPCI), card networks, payment aggregators, and payment apps—constantly works to protect customers, there is a pressing need for network-level intelligence and real-time data sharing across all payment systems. This new platform will provide data to tackle the issue of payment frauds.

Wriju Ray, Chief Business Officer at IDfy said, “One of the biggest issues faced by the industry is that of repeat offenders – where the same fraudster systematically targets multiple victims. Efforts to create an industry-wide database have so far been mired by legal and commercial issues related to sharing of personal information of fraudsters. We hope that with RBI stepping in, it will become possible to create such a database through which repeat offenders can be stopped.”

Amit Sachdev, COO, M1xchange said, “RBI’s initiative to set up a dedicated platform to tackle challenges of digital payment frauds in India is well timed. This is in line with several such initiatives undertaken by RBI to promote convenient, secure digital payments.”

Sachdev added, “The proposed dedicated platform to tackle digital payment frauds will enable access to vital additional information on frauds and thus enhance the efficacy of Digital Credit Analytics enabled on TReDS.”

Dilip Modi, Founder & CEO of Spice Money said, “As India swiftly ascends to become a digital payment leader, fueled by the extensive adoption of solutions like UPI and AePS, there has been a concurrent rise in fraudulent activities. The RBI’s annual report indicates that digital payment fraud surged more than fivefold, reaching a record ₹1,457 crore in the fiscal year ending March 2024. This initiative aims to address these challenges by underscoring the necessity for a comprehensive, system-wide approach to ensure safety and security in digital transactions.”