Credit, debit card frauds and how you can avoid them

On 19 October, the country woke up to a banking nightmare. The State Bank of India (SBI) blocked 6 lakh debit cards after a reported malware-related breach in a non-SBI ATM network. In what is possibly India’s largest financial data breach, nearly 32 lakh debit cards across 19 banks, including HDFC Bank, ICICI Bank and Axis Bank, were compromised. As per the National Payments Corporation of India (NPCI), 90 ATMs were impacted and at least 641 customers lost Rs 1.3 crore in fraudulent transactions.

Even as the council of Payment Card Industry Data Security Standard (PCI-DSS), an international body that sets data security standards, has ordered a forensic audit, banks have advised their customers to change PINs and confine themselves to own bank ATMs. The customers, meanwhile, are worried about how secure their debit and credit cards really are.

It’s a justified concern, considering that nearly 2.59 crore credit cards issued by 56 banks had a transaction worth Rs 24,341 crore via points of sale (POS) and Rs 202 crore through ATMs, while 69.72 crore debit cards registered transactions worth Rs 2.19 lakh crore through ATMs and Rs 17,100 crore via POS in July 2016. This is a fortune that fraudsters are waiting to tap into through several, ready loopholes. “Banks are definitely revisiting their network security by applying additional layers of security to prevent any compromise,” says Rajiv Anand, Executive Director, Axis Bank.

Even as the RBI and banks are trying to stay one step ahead by introducing several security features, including chip-based cards and two-factor authentication, customers need to take the initiative to prevent being conned. We list here the various ways that cards, credit and debit, can be used to commit fraud and steps you can take to steer clear of these.

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Explained in 5 charts: How Indian banks' big NPA problem evolved over years

The writing was on the wall; just that no one wanted to acknowledge it. The bad loan crisis that has gripped India’s Rs 95 trillion banking sector didn’t happen overnight.

For years, Indian lenders, especially state-run banks, were engaged in volume game to balloon their balance sheets and appease their promoter (the government). That has been so ever since nationalisation of these banks happened in two stages (beginning 1969). Governments often treated these banks as their extended arms and used them for populist measures.

There used to be competition among sarkari banks to flag their total business number on front-pages of national newspapers but very little attention was paid to the quality of assets. Every outgoing chairman passed the buck to his successor.

“That was a time (2011-2013) when everyone rushed to give money to corporations, no matter what the credit perception was. Everyone expected a miraculous pick-up in the economy,” recalled a former banker with a nationalised bank who now works as a consultant.

Firstpost takes a look at how the NPA picture of India’s government-owned banks have evolved so far:

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12 Leading Payment Services for Your Online Business

12 Leading Payment Services for Your Online Business

In this article, we take a look at some of the leading online payment services that you can integrate to your website to receive payments from your customers and clients.

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