Indian Cyber Security has been ignored for many years by the previous Governments making Indian computer systems and critical infrastructures vulnerable to sophisticated cyber attacks. One of the critical infrastructures is banking sector of India that has miserable cyber security infrastructure. The Cyber Security Trends and Developments in India (PDF) have proved this point very well.
We have no dedicated cyber security laws in India and this is creating numerous troubles for various stakeholders. The banking sector of India is also neglecting cyber security in the absence of stern and effective cyber security regulatory norms in India. Some basic level guidelines and recommendations have been issued by Reserve Bank of India (RBI) but they are far from satisfactory and being effective. These include Internet banking guidelines, formation of a RBI Working Group on Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds, RBI Recommendation on Information Security and its implementation in India, etc.
RBI has also mandated establishment of Steering Committees on Information Security by Banks in India and appointment of Chief Information Officers (CIOs) for all banks in India. However, banks in India have failed to comply with the directions of RBI so far and even RBI has allowed them to take this liberty. In effect, this means that there is neither a legal framework nor any compulsion to ensure cyber security of banks in India. Naturally, the online banking system of India is not at all cyber secure and banks in India are not following cyber security due diligence and cyber law due diligence (PDF) at all.
Sophisticated malware are targeting banking industry around the world. For instance, Malware Dump Memory Grabber has been targeting Indian banks and POS Terminals. Similarly, the Gameover Zeus or GOZ botnet is also capable of stealing sensitive banking and financial information and details. Recently, the US Justice Department even charged a Russian national for creation of Gameover Zeus (GOZ) Botnet.
India is considering wide scale adoption of mobile banking, Internet banking and other online banking and financial transactions methods. However, India has not considered the issues of mobile banking cyber security, internet banking cyber security, legal aspects of Internet banking, cyber security of e-governance services, etc.
There is no doubt that Indian online banking transactions are vulnerable to cyber attacks. The cyber security for banking and financial sectors of India must be ensured as soon as possible. Online payment market of India and e-commerce and online business legal compliances have further increased the requirements of banking cyber security in India. Similarly, cyber due diligence for Paypal and online payment transferors of India must also be ensured by these stakeholders. The sooner this is done the better it would be for the larger interest of banking sector of India.