Highlighting the importance of bolstering defenses against evolving cyber threats, RBI Deputy Governor T Rabi Sankar emphasized the need for banks to upgrade their encrypted systems during the 19th Banking Technology Conference in Mumbai last February
The Reserve Bank of India (RBI) has reportedly issued alerts to several banks, urging them to strengthen their defenses against potential cyber threats. According to a recent report , the central bank has conducted Cyber Security and Information Technology Examination (CSITE) assessments, providing action plans to address identified vulnerabilities.
These warnings to select banks come in the wake of the RBI’s ongoing efforts to enhance cyber security surveillance. The CSITE, unlike routine risk assessments, delves into various aspects including disaster management readiness, internet and mobile banking platforms, and fraud detection mechanisms.
“A separate inspection specifically targeting deficiencies in banks’ cyber security capabilities has been conducted by the RBI,” mentioned a source quoted in the report. “This recent interaction with banks involved the RBI providing a list of action points where improvements are needed.” However, the RBI did not respond to requests for further details on inspection findings and ongoing evaluations.
Highlighting the importance of enhancing defences against evolving cyber threats, RBI Deputy Governor T Rabi Sankar emphasised the need for banks to upgrade their encrypted systems during the 19th Banking Technology Conference in Mumbai last February. He specifically mentioned the necessity to counter potential abuses of artificial intelligence (AI) in the banking sector.
“The urgency for enhanced cyber security measures was also underscored by a directive from the Finance Ministry following the UCO Bank incident last year,” the report added. In November 2023, UCO Bank faced technical issues leading to erroneous credits totaling ₹820 crore via Immediate Payment Service (IMPS). “The bank clarified that these transactions stemmed from internal technical glitches and not from any fault in the IMPS platform,” the report stated. Subsequently, UCO Bank managed to recover a significant portion, ₹649 crore or 79 percent, through proactive measures such as blocking recipients’ accounts.
This concerted effort by regulatory authorities and banks reflects a growing recognition of the importance of safeguarding digital operations against cyber threats in the financial sector.
