RBI asks banks to install cyber security policy
In view of recent increase in online attacks on financial institutions' information systems, India's central bank on Thursday advised commercial banks to immediately put in place a cyber security policy in order to counter threats arising from the internet.
 
"Banks should immediately put in place a cyber-security policy elucidating the strategy containing an appropriate approach to combat cyber threats given the level of complexity of business and acceptable levels of risk," the Reserve Bank of India said in a notification to all commercial banks.
 
"It is essential to enhance the resilience of the banking system by improving the current defences in addressing cyber risks," it said.
 
The central bank asked all scheduled commercial banks to specify potential risks as "low, moderate, high and very high" and said they must report all "unusual cyber-security incidents" to the RBI.
 
It also said the new cyber security policy should be separate from the bank's broader information technology policy.
 
"The number, frequency and impact of cyber incidents/attacks have increased manifold in the recent past, more so in the case of financial sector including banks, underlining the urgent need to put in place a robust cyber security/resilience framework at banks and to ensure adequate cyber-security preparedness among banks on a continuous basis," the notification said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    COMMENTS

    Shirish Sadanand Shanbhag

    4 years ago

    In the era where cyber security norms are greatly available, Govt. of India & RBI should form proper norms for cyber security of Bank Business in our country.

    Bombay Mercantile Coop Bank mired in controversial dealings, while regulators watch silently; whistleblower agitated about the bank's future
    Investors, employees and shareholders are working overtime to draw attention to the controversial dealings at Bombay Mercantile Cooperative (BMC) Bank but their appeals to every regulator, including the Reserve Bank of India (RBI) and the Registrar of Cooperatives (ROC) seems to fall on deaf ears. 
     
    Only in January 2016, Moneylife wrote about a new management being installed at BMC Bank, which seemed determined to ensure a clean-up. But management wrangles ensured that they were thrown out and the previous regime, whose operations came in for action by the RBI and Central ROC is back in the saddle. Worse, although the RBI has imposed stringent conditions on the banks' operations in November 2015 and stopped the bank from sanctioning fresh loans, whistleblowers allege that the management is alienating assets and weakening the bank, which employees over 2,300 persons.
     
    There was a meeting of the Bank's Board on 16 May 2016 in which Zeeshan Mehdi and Mohammad Shah Alam Khan were elevated as Chairman and Managing Director, respectively. These directors had been disqualified by the RBI and Central ROC in January 2016 but have still been re-elected. The allegations against these officials, backed by documents provided by whistleblowers are indeed startling. One of the most egregious ones is that Punjab National Bank and Canara Bank have filed criminal complaint against Mr Mehdi, Mr Khan and Salauddin Najmi, Director of BMC Bank, for criminal conspiracy, cheating and criminal misconduct. Surely, this is something that would attract RBI's attention?
     
    Here are some of the other allegations levelled against the current top management of BMC Bank by whistleblowers and shareholders.
     
    1. The Bank's Branch Manager at Lucknow allegedly issued bank guarantee of Rs54 crore against six allegedly fake FD receipts of Rs9 crore each. Instead of filing a criminal case and further investigation, the Branch Manager was allegedly put under suspension.
     
    2. Mr Mehdi, the newly selected Chairman, and his partners allegedly had a credit facility of Rs12 crore from BMC Bank's Lucknow branch, which became stagnant in November 2014. In order to allow Mr Mehdi contest Bank's election held in January 2015, it is alleged that two loans of Rs7.5 crore each were sanctioned to his friend from Lucknow, without following RBI norms and without proper security. It is alleged that at that time, this loan of Rs15 crore was sanctioned to Mr Mehdi's friend/partner to adjust his NPA account for protecting his directorship at the Bank. However, it is alleged that these loans of Rs15 crore too have slipped in to NPA.
     
    3. The Bank has allegedly invested Employees Provident Fund money in unlisted companies, thus violating all extent norms of Commissioner of Provident Fund. The investments have allegedly incurred losses of lakhs of rupees.
     
    4. There are allegedly about more than Rs50 crore tied up in the Bank's quick mortality accounts.
     
    5. Mr Khan, the Bank's MD, has allegedly transferred tenancy rights of the Bank properties (especially at the head office building) without depositing any amount in the Bank's account.
     
    6. There are allegations that Mr Khan, the MD, had post facto sanctioned advances worth Rs15 crore to various parties without approval from the Board of Directors. Mr Khan, as the Bank's MD has power to sanction loans of Rs50 lakh only and for any loan above this, he is required to obtain approval from the Board.
     
    7. For FY2013-14 and FY2014-15, the Bank's MD allegedly did not provide for gratuity and leave fare concessions in the balance sheet for showing cash profits, which was misleading to depositors of the Bank as well as regulators.
     
    8. Recently, there was a case filed against Mr Khan, the Bank's MD at Pydhonie Police Station in Mumbai on alleged charges of fraud and cheating.
     
    Our emails sent to both Mr Mehdi and Mr Khan remained unanswered till writing this story. We will incorporate their view, if any, as and when we receive it. We have also forwarded these findings to RBI but have not heard from the regulator either.
     
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    User

    COMMENTS

    S.S.A.Zaidi

    4 years ago

    How can management be sitting quiet when such serious allegations are raised by Money -life is baffling to me. When such charges are allegedly made management should immediately spring up to rebut—But here nothing of such things happening—instead it seems sponsored motivated and tutored comments are posted obviously at the instance of---
    In the light of such allegations management shud come out with a rebuttal else notify them Defamation suit will be filed,. as they feel defamed .The pace at which this is going on Management does not seem worried or bothered.Therefiore conclusion will be “””kuchch to hai jis ki perdadaree hai” i.e something is kept shrouded-How damaging it is to the reputation and operational efficiency of the Bank
    Is this the quality of Leadership—it is “ we care less for you kind of attitude””

    Nasir Ghayas

    4 years ago

    Deeply hurt to see these allegations, request for fair enquiry into this and if guilty, culprits to be punished so that our beloved institution can be saved.

    Fareed Dhiyan

    4 years ago

    The news about Bombay Mercantile Co-operative Bank Ltd. in hot waters due to mismanagement by its top management is not new. It has been around for donkey's years. The question is what the regulators are doing to curb this. The current management team still comprises of people who have been under the shadow of these allegations in the past. Is the RBI and other governing bodies not aware of this.
    I urge all concerned stake holders to come clean on this and have honest management committee constituted at the behest of the RBI.

    GLN Prasad

    4 years ago

    Is there still a hope ? Can Court involve in these affairs ? I have my own doubts of such revival, as I have never heard HC/SC involvement. But if, once the rumor spreads and there may be a run on Bank, forcing appointment of a liquidator and it takes years for depositors to recover the money they have deposited, and no bank may be willing to take risk and burn their fingers, as each bank has it's own pack of problems already. Even the other bank desires for a hen that lays golden eggs and not a barren cow, that consumes food but can not yield a drop of milk and even the flesh may be unfit for consumption due to dreaded disease. Let us hope for the best, as Central Govt is coming for a powerful legislation and exploring taking possession of assets and auction it with less formalities.

    TIHARwale

    4 years ago

    Cooperative banks are fit cases of financial mismanagement but RBI has never taken timely action. even in this case maximum what the stake holders can do is o email RBI and other relevant regulatory body regarding the corrupt activities carried out by the management, mails at least will leave evidence that RBI and regulatory authorities were notified but as per practice they have slept over the corruption in Bombay Mercantile Cooperative Bank

    S.S.A.Zaidi

    4 years ago

    NO institution can survive on the basis of fear psychosis.I appeal to the people not to revel in the banks decline-Pleasure is in building an institution ---Take the bank as your family---think if this kind of chaos happens in your family -how will you react--would you
    No organisation can survive on fear psychosis As a result it will wither away .How will one react if this happens in one’s family ,will the family be allowed to disintegrate--certainly not—efforts will be made to bring all to gather to ensure family remains united and work for the common family goal and achieve it successfully.
    People in the bank should take the bank as a family and run it on family norms for the bank .Have a vision and mission statements done ,this will be the Bank common Goal TAKE EMPLOYEES INTO CONFIDENCE N MAKE A BEGINNING.I may mention here no employees and no trade union work to destroy the institution—they will not do it—their growth and prosperity is linked with the growth and prosperity of the bank---- now is the time to give back - build the bank –let it regain its glory pleasure is in building an institution –not destroying it
    Don’t make inane comment - like--‘’-organisation mein aisa hota hai-merge ho jaye gaa to kya ho ga—“how shameful an preposterous statement it is.I am an individual i would not like to lose my identity—so why the bank built over a period of years shouid lose its identity


    SHAHID M ZUBAIR

    4 years ago

    General belief hai ke Bombay Mercantile Bank’s corruption and irregularities ka ek small matter hai, lekin such is myth ke bilkul opposite hai. Actually yeh badi financial irregularities, corruption aur bank ke senior management, RBI aur Central Registrar aur bank employees ki unions ki criminal conspiracy of padora box hai. Bank ka present top management, jo bank me deposit public money se Central Registrar aur unki IAS assistant ko moti rishwate de kar dubara power me aya hai, maha corrupt, siddhant viheen, cheats and womanizer ka ek gang hai, jiski bamking knowledge zero hai. Moneylife ne inki harkato se parda utha kar bahut accha kam kiya hai, lekin yeh expose to bas ek tip of iceberg hai, kafi kuchh abhi bhi under the carpet hai.

    Present management na sirf bank me mojud public money ko lootne me laga hai, but bank ki assets sell kar raha hai and purchases me commission kha raha hai.RBI aur Central Registrar-dono regulators inform kiye jane ke bad bhi chup hain. Loans par ban ka RBI ka decision bank ke innocent customers ko punishment hai. Share holders ko last 20 years se dividend nahi mila hai and employees ki salaries revise nahi hui hain. Employees dar ke saye me jee rahen hain aur unhe roz nai tensions diye ja rahen hain. Management ka apna koi revival program nahi hai, magar staff ko low cost deposit lane majboor kiya jar aha hai/ Mujhe doubt hai ke public ka yeh deposit khatre me hai. Agar aisa hua, to RBI apni responsibility se bach nahi sakta. Jis employees union ko staff ke issues uthane chahiye, unfortunately, regulators ki hi tarah, uske office bearers bhi management ki chaploosi me lage hain and management ke spokes persons ban gaye hain.

    Lekin is sab ke beech ummed ki do kiran hain. Ek, banks irregularities par Supreme Court ka serious aur sakhat attitude and doosri, Moneylife jaise forums pe uthti awaz. Main sabhi sensitive aur responsible aur Bombay Mercantile Bank se hamdardi rakhne wale logon, specially Mr. S.S.A. Zaidi aur Mr. Zakir Inamdar jaise active logon se appeal karta hoon, ke Bombay Mercantile Bank ko lutne se bachane ke liye, ek aggressive campaign chalayen aur internet ke sath sath Electronic aur Print Media me bhi ye issues uthayen. RBI, Central Registrar, Finance Ministry and agar avashkta pade, to court ka dhyan bhi in issues par dilana chahiye, so that Bombay Mercantile Bank ko galat logo se chhutkara mile aur bank ko doobne se bachaya ja sake.

    REPLY

    Zakir Hussein Inamdar

    In Reply to SHAHID M ZUBAIR 4 years ago

    I appreciate your concern to this great institution, we are approaching all the authorities, if need be we will approach the court of law. your support is solicited.

    S.S.A.Zaidi

    In Reply to SHAHID M ZUBAIR 4 years ago

    watch my articles in MoneY life n ET

    GLN Prasad

    4 years ago

    Those who knows only Swamy and not credentials of Governor believes Swamy only. Unfortunately even media is not highlighting the extraordinary merit of Raghuram Rajan. But for PM's confidence, Governor is not having any God father, and every politician issues some statements against him as though he is responsible for every thing. One must distinguish between Macro level and micro level in functioning. Great injustice to Governor.

    GLN Prasad

    4 years ago

    I have read a face book post To rob a bank you need a gun, but to rob public you need a bank. Appears true. But it is not proper to blame Governor of RBI for failures in individual bank management and particular co-op banks.

    REPLY

    S.S.A.Zaidi

    In Reply to GLN Prasad 4 years ago

    Raghuram rajan is the internationly reputed economist and central banker of global esteem Who Bothers about subramaniam swamy???

    S.S.A.Zaidi

    4 years ago

    My comments on The BMC bank’s sorry state of affairs were not intended to offend people with past and present association with the bank.
    These comments intended to spur them on to introspect why the bank once a shining star in the firmament of the urban coop banking has more or less lost its shine. A casual comment that it is in the process of being merged with some PS bank doesn't enthuse me personally and professionally, I would not like the bank to lose its identity. Let us not revel in its decline ,le us make efforts to see how It can be put on the path that takes it to its past glory.
    I have already played my innings in domestic and international banking arena .I am now spending my time in reading and writing .My ’two books have already been published and received laudatory comments from bankers of international repute, I am working on my third book ,so I dont have any personal agenda to serve. Wherever I worked I did so with a sense of belonging. I sill take pride in being UNIONITE.


    My comments on The BMC bank’s sorry state of affairs were not intended to offend people with past and present association with the bank.
    These comments intended to spur them on to introspect why the bank once a shining star in the firmament of the urban coop banking has more or less lost its shine. A casual comment that it is in the process of being merged with some PS bank doesn't enthuse me personally and professionally, I would not like the bank to lose its identity. Let us not revel in its decline ,le us make efforts to see how It can be put on the path that takes it to its past glory.
    I have already played my innings in domestic and international banking arena .I am now spending my time in reading and writing .My ’two books have already been published and received laudatory comments from bankers of international repute, I am working on my third book ,so I dont have any personal agenda to serve. Wherever I worked I did so with a sense of belonging. I sill take pride in being UNIONITE.
    So I request my erstwhile colleague/s not to take offence but to introspect

    S Santhanam

    4 years ago

    It is another sahara in making. As mentioned by some of the readers RBI has squarely failed to protect the interests of the depositors of the bank. In India it is a curse that co-op banks are controlled by politicians at state level and PSBs are by politicians at the centre. Maybe Subramanian swamy is right that as Governor of RBI Shri Rajan has done nothing to punish the fraudulent officials both atPSBs and coops and RBI itself. He is rather refusing to release the names of wilful defaulters. Sad but true

    S Santhanam

    4 years ago

    It is another sahara in making. As mentioned by some of the readers RBI has squarely failed to protect the interests of the depositors of the bank. In India it is a curse that co-op banks are controlled by politicians at state level and PSBs are by politicians at the centre. Maybe Subramanian swamy is right that as Governor of RBI Shri Rajan has done nothing to punish the fraudulent officials both atPSBs and coops and RBI itself. He is rather refusing to release the names of wilful defaulters. Sad but true

    S Santhanam

    4 years ago

    It is another sahara in making. As mentioned by some of the readers RBI has squarely failed to protect the interests of the depositors of the bank. In India it is a curse that co-op banks are controlled by politicians at state level and PSBs are by politicians at the centre. Maybe Subramanian swamy is right that as Governor of RBI Shri Rajan has done nothing to punish the fraudulent officials both atPSBs and coops and RBI itself. He is rather refusing to release the names of wilful defaulters. Sad but true

    S Santhanam

    4 years ago

    It is another sahara in making. As mentioned by some of the readers RBI has squarely failed to protect the interests of the depositors of the bank. In India it is a curse that co-op banks are controlled by politicians at state level and PSBs are by politicians at the centre. Maybe Subramanian swamy is right that as Governor of RBI Shri Rajan has done nothing to punish the fraudulent officials both atPSBs and coops and RBI itself. He is rather refusing to release the names of wilful defaulters. Sad but true

    S Santhanam

    4 years ago

    It is another sahara in making. As mentioned by some of the readers RBI has squarely failed to protect the interests of the depositors of the bank. In India it is a curse that co-op banks are controlled by politicians at state level and PSBs are by politicians at the centre. Maybe Subramanian swamy is right that as Governor of RBI Shri Rajan has done nothing to punish the fraudulent officials both atPSBs and coops and RBI itself. He is rather refusing to release the names of wilful defaulters. Sad but true

    India Post to open payments bank with 650 branches
    India Post, which already offers limited financial services through its 154,800 post offices, is also becoming a payments bank with 650 dedicated branches involving an investment of Rs 800 crore, officials said on Wednesday.
     
    A meeting of the cabinet, presided over by Prime Minister Narendra Modi, gave its approval to the proposal, following an in-principle approval by the Reserve Bank of India earlier.
     
    Payments banks offer small savings accounts, as also remittances and mobile and net banking services, notably to migrant labour workforce, low-income households, small businesses and other unorganised sector entities.
     
    They can also accept demand deposits up to a maximum of Rs 100,000 per individual customer, issue ATM/debit cards and act as agents for simple financial products like mutual fund units and insurance.
     
    "The payments bank will be a game-changer in rural and semi-urban areas. It will help in our larger goal of financial inclusion," Communications Minister Ravi Shankar Prasad said after the cabinet meeting. 
     
    "By September 2017, all 650 branches dedicated for postal payments bank will be operational." 
     
    "All post offices, including the 1.39 lakh of the rural post offices, will be the access points for India Post Payments Bank. These post offices will be equipped with Micro-ATMs for facilitating both cash and digital transactions," the minister added.
     
    More than 50 national and international banks, insurance companies, money transfer organisations are keen to tie-up with India Post Payments Bank, he said.
     
    "We will start operations in March 2017 in about 50 districts ad quickly scale up to cover the entire country by the end of financial year 2018-19."
     
    Prasad said the India Post Payments Bank will be professionally managed and run by a chief executive, with assistance from the designated of the departments of posts services, expenditure and economic services. 
     
    "The payments bank will have 5,000 ATMs," the minister said. As regards the Rs 800 crore investment, half of it will be in the form of equity and the rest as grant, he added.
     
    Some limited banking services are not new at post offices, which have been facilitating people to open savings accounts, recurring deposits, time deposit accounts and monthly income schemes and senior citizen savings schemes.
     
    In addition, they also facilitate the opening and maintenance of provident fund accounts, and the purchase of National Savings Certificates, Kisan Vikas Patra and Sukanya Samriddhi accounts for the girl child.
     
    The payments bank was first proposed by Finance Minister Arun Jaitley in 2014.
     
    “After making suitable changes to current framework, a structure will be put in place for continuous authorization of universal banks in the private sector in the current financial year," Jaitley said in his budget speech on July 10, 2014.
     
    "Differentiated banks serving niche interests, local area banks, payment banks are contemplated to meet the credit and remittance needs of small businesses, unorganised sector, low income households, farmers and migrant work force.”
     
    Highlights of the India Post Payments Bank:
     
    * It will offer basic banking, payments of direct benefit transfers, utility bills, collection of taxes and fees, remittances.
     
    * It will also provide easy access to loans, collect EMIs, provide insurance (life, health, accident, two-wheeler/auto, crop, etc), pensions, investment opportunities like mutual funds, forex etc. in tie up with third party financial service providers.
     
    * It will have a focus on rural, semi-urban, unbanked areas and among the under-banked segments of the society.
     
    * India Post Payments Bank will usher in state of the art internet and mobile banking platforms, digital wallets, use emerging technologies such as Unified Payments Interface (UPI), e-KYC and catalyse the shift from a cash dominant to a less cash economy. 
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  • User

    COMMENTS

    Shirish Sadanand Shanbhag

    4 years ago

    Considering the fact that Post Office offers its Savings bank facility to more than 1.5 lakh branches in India, creation of Payment Bank will popularise Post Office Savings Bank facility in India.
    In order to populariser its savings Bank facility, maximum balance be increased to Rs.2.5 lakh in single name and 5 lakh in joint name. It should also provide Savings Bank facility to business houses, and details of cheque be printed in the pass book.
    A cheque drawn in the name of Post Office Savings Bank (POSB) A/c holder be encashable in his/her/their POSB.

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