Could Indian Banks Face A Major Cyber Threat? Here's What The RBI Advises!

Banks across India have been put on high alert following an announcement by the Reserve Bank of India (RBI) regarding potential cyber attacks, as reported by the Economic Times.

Financial institutions have been instructed to maintain continuous surveillance on their systems, including SWIFT, card networks, RTGS, NEFT, and UPI.

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Banks Across India on High Alert - Here's Why

An advisory issued by the RBI has highlighted credible intelligence about potential cyber threats. It stated, "In light of credible threat intelligence received regarding potential cyberattacks, regulated entities are advised to put in place enhanced states of surveillance and resilience capabilities to guard against these threats," as reported by Hindustan Times.

Concerns About Cyber Attacks on Banks

The RBI's concerns were amplified by the recent reactivation of LulzSec, a group associated with several high-profile cyber attacks on Indian banks, as mentioned by the Economic Times. The group had been inactive for some time but has recently become active again, raising alarms across the financial sector.

According to the RBI's Financial Stability Report, over the past 20 years, more than 20,000 cyber attacks have been reported in the financial sector, leading to losses amounting to $20 billion.

Prevalence and Nature of Cyber Attacks

A report by the Data Security Council of India in December 2023 indicated that 25% of cyber attacks in India originated from clicking on malicious links in emails and websites.

The report further revealed that 69% of cyber attacks on financial institutions were reported by scheduled commercial banks (SCBs), 19% by urban co-operative banks, and 12% by non-banking finance companies (NBFCs), according to Business Line, citing the RBI's financial stability report.

Banks' Measures to Protect Customers

In response to the increasing threat of cyber-attacks, banks have been reported to increase their insurance coverage by nearly 8% in the 2023-24 period compared to the previous year, as reported by Business Standard, citing insurance brokers. It has been noted that cyber insurance claims by banks rose to over 50% during the financial year 2022-23, up from 40% in the previous year.