―A Study On Impact Of Cyber Crime In Banking Sector‖

CHAPTER-1

INTRODUCTION

1.1 Introduction

Cybercrime is a digital wrong doing any illegal activity committed using a computer
or using the net is known as cybercrime. Digital criminal acts are a variety of wrong
doings. Which utilize machines and network system for criminal exercises. The
distinction between customary unlawful acts (traditional crime) and digital wrong
doings is the digital law violations can be transnational in crime. Cyber crime is a
crime that is committed online in many areas using network and e-commerce. A
computer can be the used for an offense when an unapproved access of computer
system happens and on the other hand it influences e-commerce.

Computer crimes are criminal activity which involves the use of information
technology to give all illegal or all unauthorised access to computer system with
internet of damaging, deleting or altering computer data. Computer crime also
includes the activities such as electronic frauds, misuse of devises, identity theft and
data as well as system interference. The usage of internet service is india increasing
rapidly.

In developing economies cyber crime increased rapidly due to high usage of the
internet and digitalisation of economic activities. Need of strict statutory laws to
regulate the criminal activity in the cyber world was needed which should also aim to
protect technological advancement system as the misuse of technology was increasing
at a very high rate.

1.2 types of cyber crimes

1. Hacking: among the all types of cybercrimes it is the most dangerous and serous
thread to the internet and e-commerce. Hacking simply refers to the breaking into
the computer system and steals valuable information (data) from the system and steals
without any permission. Hacking is done by hacker now the question arises who are
hackers; hackers are in b/w client and able to spoof the data/info. Duplication the ip
address illegally.

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2. Phishing: phishing simply refers to steal information like passwords, credit card
details, use name etc. Over the internet. Phishing is typically carried out by email
spoofing and instant messaging. In this type of crime hackers make a direct link
which directs to the fake page / website which looks and feel like identical to the
legitimate one.
3. Denial of service: a denial service (―dos‖) is an attack or intrusion designed for use
against computer connection to the internet where by one user can deny service to
other legitimates users simply by flooding the site with so much traffic that no other
traffic that no other traffic can get in or out. The hacker isn‘t necessarily trying to
break in to the system or steal data but rather just prevent users from accessing their
own network for reason only the hackers know; revenge economical or political gain,
or just plain nastiness. For example, in feb 2000, a fifteen-year-old canadian boy
known as ―mafia boy‖ allegedly used a dos attack to shut down popular internet sites
such yahoo, amazon .com, buy.com and others.
4. Cyber stalking: cyber stalking in when a person in followed and pursued online.
Their privacy is invaded, their every move watched. It is a form of harassment, and
can disrupt the life of the victim and leave them feeling very afraid and threatened.
Stalking or being followed‘ are problems that many people, especially woman, are
familiar with. Sometimes these problems (harassment & stalking) can occur over the
internet. This is known as cyber stalking. The internet mirrors the real world.That
means it also reflects real life & real people with real problems. Although it is rare,
cyber stalking does occur, cyber stalking usually occurs with women, who are
stalking by men, or children who are stalked by adult predators or paedophiles.
5. Cyber pornography: this would include pornography website; pornography
magazines produced using computers (to publish, photos, writings etc.) Recent indian
incident revolving around cyber pornography include the air force balbharati school
case. A student of the air force bal bharati school, delhi, was teased by all his
classmate for having a pock marked face.
6. Email spoofing: a spoofing email is one that appears to originate one source bur
actually has been sent from another source. E.g. Pooja email sends and obscene from
pooja, her friend could take offence and relationship could be spoiled for life. Email
spoofing can also cause monetary damage. In an american case, a teenager made
millions of dollars by spoofing false information about certain companies whose

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shares he had short sold.

7. Cyber defamation: this occurs when defamation takes place with the help of
computers and /or the internet. E.g. Someone publishes on a website or send emails
containing all defamatory information to all of that person‘s friend‘s girl was about
to be married to suraj she was really pleased because dispute it being an arranged
married seemed to be open minded and pleasant. Then, one day when she met
suraj, he looked worried and even a little upset.
8. Forgery: counterfeit currency notes, postage and revenue stamps, mark sheet etc can
be forged using sophisticated computer, printers and scanners. Outside many colleges
across india. One finds touts soliciting the sale of fake mark sheet or even certificates.
These are made using computers and highly quality scanners & printers. In fact, this
has becoming a booming business involving thousands of gangs in exchange for
these bogus but authentic looking certificates.
9. Online gambling: there are millions of websites; all hosted on servers gambling. In
fact, it is believed that many of these websites are actually front for money
laundering.
10. Sale of illegal articles: this would include sales of narcotics. Weapon and
wildlife etc.., by posting information on websites, auction websites, and bulletin
boards or 167 simply by using email communication. E. G many of the auction sites
even in india are believed to be selling cocaine in the name of ―honey‖.
11. Internet fraud: internet fraud can occur in chat rooms, email, message broad
or on websites. In internet fraud criminal can send fake info to the victim in cases like
online purchasing, real estates, pay bal. Work-at-home donation processing etc.
12. Spreading computer virus: it is a set of instruction which is able to perform
some malicious operations. Viruses stop the normal function of the system programs
and also to the whole computer system. They can also ruin /mess up your system and
render it unusable without reinstallation of the operating system. A computer virus
can be spread through- emails, cds‘ pen drives (secondary storage), multimedia,
internet.
13. Cyber warfare: it is internet-based conflict involving on politically
motivation attacks on information system cyber warfare attacks can disable official
websites and networks, disrupts or disable essential services, steal or alter classified
data,and cripple financial systems among many other possibilities.

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14. Voice phishing: the term is a combination of ―voice‖ and phishing voice
phishing is use to gain access of private, personal and financial information from the
public. Voice phishing uses a landline telephone call to information.
15. Malicious software: these are internet-based software or program that are use
to gain access to a system to steal sensitive information or data or causing damage to
software present in system.

1.3 Impact of cyber crime:

Technological development appears in a row. The trend shows that internet

technology in used to help work and conduct business activities. This activity includes
student, employees, and the upper classes. Cyber technology is a system that is
implemented to facilities fast & instant relationship. If the system does not have a
defence, then will be a threat and target from wild parties. The use of information
technology is to provide benefits to the community also has the opportunity to be
misuse to commit crime both ordinary and professional which has as impact on
massive financial losses. Negative impacts can lead to the collapse of the social order
system, the paralysis of the country‘s economy, the weakness of the defence system
ad can also be used for terror devices.

Companies in doing business depend a lot of banks because they an online

transaction system. Without realizing it, online transaction can case cause enormous
losses for the business person. The mistake that often occurs is neglect of maintaining
privacy and account. Business can also be done anywhere as long as there is internet
access. Even important information is stored on a computer and can be accessed
anywhere because the data is stored online. It is also what cause cybercrime. The bank
also runs the banking process using internet access. For example. Atm has its network
that can accessed by customer anywhere. If cybercrime perpetrators can enter the
atm system, funds owned by customers will be lost one by one. The use of
computers will also be disrupted so that the banking process cannot run smoothly.
Information related to customer data can be misused.

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1.4 History of cyber crime:

 The subsequent history of crimes committed using a computer, is noted the

following most notable cases:
 In 1973, the cashier of the new york citibank transferred into his account 2
million dollars, using the office computer.
 The end of the 70‘s – ―robbery‖ of ―security pacific bank‖ (10,2mill, usd);
 1985-disabling using the ―virus‖ of electronic voting system in the usa
congress;1987-1988 gg – the appearance of the first computer virus in user;

 1987- the invasion of 17-year-old hacker in the us computer system. This

invasion is still considered the most dangerous because the offender was able
to walk air base ―robbins‖. His presence was detected only after he look copies
of the software, estimated at artificial intelligence:
 1989- american student lock computer 6000 pentagon; international congress
of the computer‖ pirates‖ in the netherlands with a demonstration of the
possibility of unlimited introduction of computer system;
 1990-disabling nasa, work foe 24 hours, a group of australian hackers. 1991-
theft in our economy back a 125.5 thousand dollars;
 1992-the deliberate disruption of the lanoline nuclear power plant reactors
acs;
 1993-some electronic fraud in the central bank of russia (in the amount
of 68 billionrub.);
 1995-an attempt to steal a russian engineer of the city-bank 2.8 million dollars
(bain, 2010).
 Currently, no one is surprised intrusion into computer systems, computer
viruses, and fraud committed using internet technologies. He history of
computer crime turns into a story of growth statistics on criminal assault on
global information networks. The history of cybercrime is inextricably linked
with the history of legislation to combat abuse in the sphere of high
technologies. In the future, we will analyse this relationship.

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1.5 Trends changing cyber security:

1. Web service: the threat of attacks on web applications to extract data or to distribute
malicious code persists, cyber criminals distribute their malicious code via
legitimate wed servers they‘ve compromised. But data- stealing attacks, many of
which get the attention of media, are also a big threat. Now, we need a greater
emphasis on protecting wed servers and web application. Web servers are especially
the best platform for these criminals to steal the data. Hence one must always use a
safer browser especially during important transactions in order not to fall as a prey for
these crimes.
2. Could computing and its services: these days all small, medium and large
companies are slowly adopting could services. In other words, the world is slowly
moving towards the clouds. This latest this presents a big challenge for cyber security,
as traffic can go around traditional points of inspection. Additionally, as the
number of applications available in the cloud grows, policy control for wed
applications and cloud services will also need to evolve in order to prevent the loss
of valuable information. Through cloud services are developing their own models still
a lot of issues are being brought up about their security. Cloud may provide immense
opportunities but it should always be noted that as the cloud evolved so as its security
concerns increase.
3. Apt’s and targeted attacks: apt (advanced persistent threat) is a whole new level of
cyber crime ware. For years network security capabilities such as wed filtering or ips
have a key part in identifying such targeted attacks (mostly after the initial
compromise). As vague techniques, network security services must integrate with
other security services on order to detect attacks. Hence one must improve our
security techniques in order to prevent more threats coming in the future.
4. Mobile networks: today we are able to connect to any one in any part of the world.
But for these mobile network‘s security is a very big concern. These days firewalls
and other [security measures are becoming porous as people are using devices such as
tablets, phones, pc ‗s etc all of which again require extra securities apart from those
presents in the application used. We must always think about the security issues of
these mobile networks. Further mobile network is highly prone to these cyber crimes
a lot of care must be taken in case of their security

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5. Ipv6: new internet protocol: ipv6 is the new internet protocol which is replacing
ipv4 (the older version), which has been a backbone of our networks in general and
the internet at large. Protecting ipv6 capabilities. While ipv6 is a wholesale
replacement in making more ip address available, there are some very fundamental
changes to the protocol which need to be considered in security policy. Hence it is
always better to switch to ipv6 as soon as possible in order to reduce the risks
regarding cyber crime.
6. Encryption of the code: encryption is the process of encoding messages (or
information) i such a way that eavesdroppers or hackers cannot read it. In an
encryption scheme, the message or information is encrypted using and encryption
algorithm, turning it into an unreadable cipher text, this is usually done with the use of
an encryption key, which specifies how the message is to be encoded, encryption at a
very beginning level protects data privacy and its integrity. But more use of
encryption brings more challenges in cyber security. Encryption is also used to protect
data in transit, for example data being transferred via networks (e. G. The internet, e-
commerce), mobile telephones, wireless microphones, wireless the code one cam
know if there is any leakage of information.

1.6 Cyber security techniques:

1. Access control and password security: the concept of user name and password has
been fundamental way of the first measures regarding cyber security.
2. Authentication of data: the documents that we receive must always be authenticated
be before downloading that is it should be checked if it has originated from a trusted
and a reliable source and that they are not altered. Authenticating of these documents
is usually done by the anti virus software present in the devices, thus a good anti
virus software is also essential to protect the devices from viruses.
3. Malware scanners: this is software that usually scans all the files and document
present in the system for malicious code or harmful viruses. Viruses, worms, and
trojan horses are example of malicious software that are often grouped together
and referred to as malware.
4. Firewalls: a fire is a software program or piece of hardware that helps screen out
hackers, viruses, and worms that try to reach your computer over the internet. All
message entering or leaving the internet pass through the firewall present, which

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examines each message and blocks those that do not meet the specified security
criteria. Hence firewall play an important role in detecting the malware.
5. Anti-virus software: antivirus software is a computer program that detects, prevents,
and acts to disarm or remove malicious software program, such as include an auto-
update. Most antivirus enable the program to download profiles of new viruses so that
it can check for the new virus as soon as they are discovered. An anti virus software is
a must and basic necessity for every system.
6. Cyber ethics: cyber ethics are nothing but the code of the internet. When wepractice
these cyber ethics there are good chances of us using the internet in a proper and
safer way.

The above area few cyber ethics one must follow while using the internet. We are
always thought proper rules from out very early stages the same here we apply in
cyber space. Day, are challenging organisations with not only how they secure their
infrastructure, but how they require new platforms and intelligence to do so. There is
no perfect solution for cyber crimes bur we should try our level best and secure
future in cyber space.

1.7 Reasons for cybercrime:

―The concept of law‖ has said human beings are vulnerable so rule o law us required
to protect them. Applying this is the cyberspace we say that computers are vulnerable
so rule of law is required to protect and safeguard them against cybercrime. The
reasons for the vulnerability of computers may be said to be:

1. Capacity to store data in comparatively small space: the computer has unique
characteristics of storing data in a very small space. This affords to remove or
derive information either through physical or virtual medium makes it much easier.
2. Easy to access: the problem encountered in guarding a computer system from
unauthorized access is that there is every possibility of breach not due to human
error but due to the complex technology. By secretly implanted logic bomb, key
loggers that can steal access codes, advanced voice recorders: retina imagers etc. That
can fool biometric systems and bypass firewalls can be utilized to get past many a
security system.

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3. Complex: the computers work on operating system and these operating system in turn
are composed of millions of codes human mind is fallible and its is not possible that
there might not be a lapse at any stage. The cyber criminals take advantage of these
lacunas and penetrate into the computer system.
4. Negligence: negligence is very closely connected with human conduct. It is therefore
very probable that while protecting the computer system there might be any
negligence which in turn provides a cybercriminal to gain access and control over the
computer system.
5. Loss of evidence: loss of evidence is a very common & obvious problem as all the
data are routinely destroyed. Further collection of data outside the territorial extent
also paralyses this system of crime investigation.

1.8 Cyber criminals:

The cyber criminals constitute of various groups/ category. This division may be
justified on the basis of the category of cyber criminals

1. Children and adolescents between the age group of 6-18 years: the simple reason
for this type of delinquent behaviour pattern in children is seen mostly due to the
inquisitiveness to know and explore the things. Other cognate reason may be to
prove themselves to be outstanding amongst other children in their group. Further
the reason may be psychological even. E. G. The bal bharati (delhi) case was the
outcome of harassment of the delinquent by his friends.

2. Organised hackers: these kinds of hackers are mostly organised together to fulfil
certain objective. The reason may be to fulfil their political bias, fundamentalism, etc.
The pakistanis are said to be one of the best quality hackers in the world. They mainly
target the indian government sites with the purpose to fulfil their political objectives.
Further the nasa as well the microsoft sites is always under attacks by the hackers.
3. Professional hackers/ crackers: their work is motivated by the colours of money.
These kinds of hackers are mostly employed to hack the site of the rivals and get
credible, reliable and valuable information. Further they are employed to crack the
system of the employer basically as a measure to make it safer by detecting the
loopholes.

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4. Discontented employees: this group include those people who have been either
sacked by their employer or are dissatisfied with their employer. To average they
normally hack the system of their employee.

1.9 Prevention of cyber crime:

The mantra of any good security engineer is; ‗security is a not a product, but a
process.‘ it‘s more than designing strong cryptography into a system: it‘s designing
the entire system such that all security measures, including cryptography, work
together.

A state of computer ―security‖ is the conceptual idea, attained by use of three

processes: threat prevention, detection, and response [13]. These processes are based
on various policies and system components, which include the following:

1. User account access controls and cryptography can protect system files and data,
respectively.
2. Firewalls are by far the most common prevention system from network security
perspective as they can ( if properly configured) shied access to internal network
services, and block certain kinds of attacks through packet filtering.

3. Intrusion detection system (idss) are designed to detect network attacks in progress
and assist in post attack forensic, while audit trails and logs serve a similar function
for individual systems.
4. ―response‖ is necessarily defined by the assessed security requirements of an
individual system and may cover the range from simple upgrade of protections to
notification of legal authorities, counter-attacks, and the like.
1.10 Cyber crime is impacts various sectors:

1. Banking
2. Business
3. Education
4. Government / military
5. Medical / healthcare
6. Preparing across industries

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1. Banking: the banking / finance arena is a clear target for cyber criminals, and this
year hackers certainly haven't been about launching wide-ranging attacks on every
type of financial business out there. As of october 13, there type have been 58
breaches in this sectors that the idfrc has recorded, and all told, more than 5 million
records have been compromised so for this year
2. Business: enterprises in the business sector also felt victim to multitude of cyber-
attacks this year, as ifrc‘s breaches, the business sector represent 39.1 percent of
incidents, although the number of actual breaches records was small when compared
to industries government and medical. When you consider the kind of information
that education networks- particularly post secondary institutions- have on record
information for students, staff, and alums as academic records) it becomes easier to
see why make such a prime target. Educational organizations are, as security expect
chad a. Holmes explained, ―really a playground for hackers.‖ As of october 20, there
have been 754,100 education records breaches this year. Here are some of the more
notable incidents.
3. Government / military: government and military enterprises have certainly not been
spared the burden of having to deal with major hacks this year. All told, there have
been government records breached so for in 2015, which comprises 19.3 percent of
total compromises records. Unfortunately for government and military entities, these
number are only set to rise, since cyber criminals see particular value in government
targets, which can often even more privileged data than which could be collected from
an attack on a different sector. Here is some of significant government and military
hacks to take place this year.
4. Medical / healthcare: medical and healthcare –based breaches currently result in the
greatest number of breached records. Accounting to the ifrc‘s data, incidents from this
sector resulted in 119,908,807 compromised records- or 68.3 largely explained by the
value of information contained within these networks. Within the cyber –criminal
realm, person health records represent some of the most sough – after data out there
due to health records often being able to provide identity – based data –such as
social security numbers – that are permanently tied to an individual, and therefore
cannot be cancelled in the way, say, a debit card can be, as electronic health reporter
stated.

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Chapter-2

Review of literature and research design

2.1 Review of literature

1. Dr. Anitha mirchandini a study on emerging challenges of indian retail banking an

insight into rising fraudulent practices in the banks. The study seeks out for evaluating
various causes that are responsible for banks frauds and examining the extent to
which bank employees follow the fraud detention and prevention measures prescribed
by reserve bank of india. It also aims to highlight the areas that are prone to fraud and
the way organisation are fighting their jeopardy and getting themselves equipped for
the future.
2. S. Kumudha and aswathy rajan a study on a critical analysis of cyber phishing and
its impact on banking sector. The most dangerous frauds that cause in day to day
banking using social engineering techniques. The aim of the paper is to discuss the
various ways by which the phishing affects the internet banking and also discuss the
implementation of safety, security measures adopted by the users.
3. Mrs. Vinaya chaturvedi a study on cyber crime technological blight in digital
banking in india financial institutions customer of the bank individuals. Business man
access their accounts obtain information on different financial product and service
through internet. The popularity of users of computer in cyber world one can witness
expansion the growth of technology which made the term cyber more familiar to the
people. As one can witness increase in the use of technology. Electronic banking also
emerged in indian banking system. Misuse of technology in the cyber space also
started which gave initiation to cyber crime at the domestic as well as international
level.
4. Shubham kumar and uday kumar a study on present scenario of cybercrime in
india and its preventions. Cyber crime involves the breakdown of privacy or damage
to the computer system property such as files, website pages, or software. In india
most of the cases found where crimes are committed due to lack of knowledge or
by mistake in their paper. Author have discussed various category and case of cyber-
crime which is committed due to lack of knowledge or some time due to intention
behind.

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5. Liaqat ali, faisal ali, priyanka surendran and bindhya thomas a study on the
effects of cyber threats on customer‘s behaviour in e-banking services. This paper
critically analysis and discusses the effects of cyber threats when dealing with online
banking services. It is concluded that by the research there is a need to increase
customer‘s awareness about available cybercrimes when dealing with online
banking.
6. Simran, akshay, manvikar, vaishnavi joshi and jatin guru a study on cyber crime
a growing threat to indian banking sector. This paper focuses on the technical aspects
of various types of cyber crime concerting the banking units and their related impacts.
Additionally, it identifies the threat vectors supporting their crimes and develops
measures to aid in combating the resulting cyber-attack can be better prevented in the
future for enhanced security.
7. Mrs. V. Bhargavi and dr.m. lokanandha reddy a study on cyber security attacks in
banking sector. Emerging security challenge and threats. This paper seeks to provide a
view of the current cyber threats targeting the banking industry in order to promote
dialogue on collective protection strategies. The cyber challenge will remain
complex. Threat will evolve rapidly with the development of new technologies the
ever-changing geo-political landscape and not surprisingly from our efforts to counter
them.
8. A.r. raghavan and latha parthiban a study on the effects of cybercrime on a bank‘s
finances. The information communication technology (ict) has revolutionized
different aspects of human life and has made our lives simpler. It has been applied in
different industries and has made business processes simpler by sorting summarizing
coding and customizing the processes. Cybercrimes have affected different industries
and banking sector is one of these which have witnessed different forms of
cybercrimes like atm fraud, phishing, identity theft, denial services

2.2 Objectives

1. To study cybercrimes and its implications on the banking sectors.

2. To analyses and use preventive measures available to control fraud.
3. To study the preferences of customers towards internet and digital banking.
4. To understand cybercrime methods.
5. To know the importance of cyber laws.

2.3 Statement of problem

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Cybercrime is a growing threat in the virtual world because individuals and

organization are relying more on internet at an increasing rate. The use of internet and
other technologies have enhanced the risk of attacks from cyber criminals across the
globe. There is a need for the banks to evaluate their current operating practices.

2.4 Research methodology

Secondary data

The present study is purely a secondary data. Case study method is being used in the
present study. The data for the present study is being collected through various
articles, journals, websites like rbi and cyber security etc.

2.5 Scope of the study

The present study focuses on impact of cybercrime in banking industry. The study is
purely based on secondary sources and majorly focus on the problems faced by
banking industry from cybercrime, the challenges arising, and the strategies to be
implemented about minimize the cybercrime are discussed.

2.6 Limitation of the study

 The study area restricts to banking industry only.

 Present study is carried out only on the cybercrime activities on banking industry
 This study is based on secondary data only.

2.7 Chapters schemes

Chapter 01: Introduction

Introduction, types of cybercrime, impact of cybercrime, history of cybercrime trends

change in cyber security, cyber security techniques, reasons for cybercrimes is
impact various sector

Chapter 02: cyber crime

Review of literature, objectives of study, statement of the problem, scope of the study,
methodology, limitations of the Study ,

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Chapter 03: Banking sector

Introduction, types of frauds in banks, actor of the banking trend impact of

cybercrime on banks history structure of banking in india banking reforms in india
recent trends in banking system, challenges, strategies implemented by banking
industry security measure for banks from cyber fraud

Chapter 04: case studies on cybercrime on banking sector

Online credit card fraud on e-bay, Indian website is target of hackers, tamil tiger
credit card scam spread to chennai, city principal seek policy help to stop cyber, upi
bank hacked up in phishing attack

Chapter 05: conclusions

Findings, suggestions, conclusion

Annexure

 Bibliography

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CHAPTER-3
BANKING SECTOR

3.1 Introduction

Economy is one of the pillars which defines the progress and growth of a nation.
Banking sector is considered as the backbone of the economy. For our day-to-day
transactions, we enter into monetary transaction in the form of cash payments,
cheques or demand drafts. However, this trend has paved the way to a modern system
of payment in the form of swiping of debit cards or credit cards. On the
recommendation of the committee on financial system (narasimha committee) 1997-
1998, information and technology in banking sector was used

.on the hand technology has created advantages for banks and financial institutions
but on the other hand, there have been risks involved in it as well. Technology risks
not only have a direct impact on a bank as operational risks but can also exacerbate
other risks like credit risks. Given the increasing reliance of customer on electronic
delivery channels to conduct transactions, any security related issues have the
potential to undermine public confidence in the use of e-banking channels and lead to
reputation risks to the banks. Inadequate technology implementation can also induce
strategic risk in terms of strategic decision making based on inaccurate
data/information.

Banking sectors has witnessed expansion of its service and strives to provide better
customer facility through technology but cyber-crime remains an issue. Information
which is available online is highly susceptible to be attacked by cyber criminals .4
cyber-crime results in huge monetary losses which are incurred not only by the
customer but by the banks also which affected economy of a nation. Non –
monetary cyber –crime occurs when viruses are created and distributed on another
computer or internet. The mostcommon of it is phishing and pharming.

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3.2 Types of frauds in bank

1. Stolen checks:

Fraudsters may seek access to facilities such as mailrooms, post offices, offices of
tax authority, a corporate payroll or a social or veterans benefits office, which process
cheques in large numbers. The fraudsters then may open bank accounts under
assumed names and deposit the cheques, which they may first alter in order to appear
legitimate, so that they can subsequently withdraw unauthorized funds. Alternatively,
forge seemingly legitimate signatures on the cheques, also in order to illegally gain
access to unauthorized funds.

2. Cheque kiting:

Cheque kiting exploits a banking system known as ―the float‖ wherein money is
temporarily counted twice. When a cheque is deposited to an account at bank x, the
money is made available immediately removed from the account at bank y at
which the cheque is drawn. Thus, both banks temporarily count the cheque amount as
an asset until the cheque formally clears at bank y. The float serves a legitimate
purpose in banking but intentionally exploiting the float when funds at bank yare
insufficient to cover the amount withdraw from bank x a form of fraud.

3. Forgery and altered cheques:

Fraudsters have altered cheques to change the name (in order to deposit cheques
intended for payment to someone else) or the amount on the face of cheques, simple
altering can change $ 100.00 into $ 100,000.00 (however, transactions for such large
values are routinely investigated as a of policy to prevent fraud.)

4. Accounting fraud:

In order to hide serious financial problem, some businesses have been known to use
fraudulent book keeping to overstates sales and income, inflate the worth of the
company‘s assets, or state a profit when the company is operating at a loss. These
tapered records areas then used to seek investment in the company‘s bond or security
issues or to make fraudulent loan application in a final attempt to obtain more money

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to delay the inevitable collapse of an unprofitable or mismanage firm. Example of

accounting frauds: enron and world com and ocala funding. These companies ―cooked
the books‖ in order to appears as through they had profit each quarter, when in fact
they were deeply in debt.

5. Rogue traders:

A rogue trader is a trader at a financial institution who engage in unauthorized trading

to recoup the loss he incurred in earlier traders. Out of fear and desperation, he
manipulates the internal controls to circumvent detection to buy more time.

6. Fraudulent loan:

One way to remove money from a bank is to take out a loan, which bankers are more
than willing to encourage if they have good reason to believe that the money will be
repaid in full with interest. A fraudulent loan, however, is one in which the borrower
is a business entity controlled by a dishonest bank officer or an accomplice the
―borrower‖ then declares bankruptcy or vanishes and the money is gone. The
borrower may even be a non- existent entity and the loan merely an artifice to conceal
a theft of a large sum of money from the bank. This can also see as a component
within mortgage fraud.

7. Fraudulent loan application:

These take a number of forms varying from individual using false information to hide
a credit history filled with financial problem and unpaid loans to corporation using
accounting fraud to overstates profits in order to make a risky loan appears to be a
sound investment for the bank.

8. Forged or fraudulent documents:

Forged documents are often used to conceal other theft; banks tend to count their
money meticulously so every penny must be accounted for. A document claiming
that a sum of money has been borrowed as a loan, withdrawn by an individual
depositor or transferred or invested can therefore be valuable to someone who
wishes to conceal the fact that the bank‘s money has in fact been stolen.

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3.3 Actor of the banking trend:

Each of these actors and their characteristics have been define below:

1. Cyber criminals

Based on the oecd report (2007), these malicious exploiters can be categorized into
five sub categories, 1) innovators (who seek to find security holes in the system to
overcome protection measures adopted by the banks). 2) amateur (who are beginners
in this area their expertise is limited to computer skills, exploited by the cyber
criminals). 3) insider (who are working within the bank to leak out important
information in order to take some kind of revenge). 4) copy cats (they are interested in
recreating simple tasks). 5) criminals (highly organize and very knowledgeable who
may use all the above-mentioned stake holders for their own profit).

2. Money mules

As per the definition given by oecd report (2007), money mules are individuals
recruited wittingly and often unwittingly by criminals, to facilitate illegal funds
transfers from bank accounts.

3. Victims

Victims, according to oecd (2007), in the banking sectors can be categories into
two categories; banks and users of these banks. The users or customers can be
individual, sme‘s who do so by not employing risky online behaviour or by not
employing security measures during transactions.

4. Security guardians

They are the most important actor of this system as they improve the existing banking
system and help in removing the vulnerabilities and development of system so that
banking frauds can be mitigated. The security guardians in case of banking sector
could be the bank itself or some third party hired by the bank in order to ensure
security from such threats.

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3.4. Impact of cybercrime on banks:

Finances the banking industry across the globe is facing a challenging situation
which is though provoking due to the geopolitical and global macro economic
conditions. The banking sectors is forced to evaluate its current practices in order to
analyse an manage their risks effectively. Technology – driven approaches have been
adopted for the management of risk due the growth of information and technology
(it), penetration of mobile networks in everyday life, the financial services have
extended to, asses. Technology has made sure that banking services reach masses as
it made these services affordable and accessible (kpms, 2011).

However, this has also increased the risk of becoming targets of cyber attacks
cybercriminals have developed advanced techniques to only cause theft of finances
and finances but also to espionage businesses and access important business
information which indirect impact the banks finances.

In order to fight these cybercrimes, the banking sector needs to collaborate with
global authorities and watchdog organisations so that a model can be developed
which can helpin controlling. There are many frauds and cyber crime digital era made
in banking sectors and dealing with such threats. The main issues of concern here is
that there is absence of effective completion service in the banking sectors which can
identify the trends in cyber- crime and compile a model according to it.

3.5. History:

The history of Indian banking can be divided into three main phases

1. Phases1 (1786-1969) initial phases of banking in india:

The first banks were the general bank of india, which started in 1786, and bank of
hindustan, both of which are now defunct. The oldest bank in existence in india
is the state bank of india, which originated in the ―the bank of bengal‖ in calcutta in
june 1806. This was one of the three presidency banks, the other two being the bank
of bombay and the bank of british east india company. The three banks merged in
1921 to form the imperial bank of india. For many years the presidency banks acted as
quasi- central banks, as did their successors. The first fully indian owned bank was

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the allahabad bank, established in 1865. However, at the end of late 18th century,
they were hardly any banksin india in the modern sense of the term. Banking in india
remained the exclusive domain of europeans for next several decades unit the
beginning of the 20th century. Foreign banks too started to arrive, particularly in
calcutta in the 1860s. The compote d‘es completed paris opened a branch in calcutta
in 1860, and another in bombay in 1862; branches in madras and pondicherry, then
french colony followed. Calcutta was the most active trading port in india, mainly
due to the trade of the british empire, and so become a banking centre. The reserve
bank in india formally took on the responsibility of regulating the indian banking
sector from 1935. After india‘s independence the reserve bank in india. Under the first
the rbi act 1984 and given broader powers. Before 1969. State bank of india (sbi) was
the only public sector bank in india. Under the first phase of nationalization of banks,
it was nationalized in 1995 under the sbi act of 1996.

2. Phase 2 (1969-1991) nationalization, regularization and growth:

After india‘s independence, the imperial bank of india became the state bank of india
in 1995. The second phase of nationalization of banks took place in 1969. Fourteen
banks were nationalized in this year by the then prime minister of india mrs.
Indiragandhi. In the year 1980, six more banks were nationalizing with deposits over
200 crores. The major objectives behind nationalization was to spread banking net
work in the rural areas and make available cheap finance to indian farmers. Until the
1990s, the nationalized banks grew at a pace of around 4% closer to the average
growth rate of the indian economy.

3. Phases 3 (1991 on words) liberalization and its aftermath:

Today, indian banking sector is mature with banks having strong and transparent
balance sheets. The major growth drivers are increase in retail credit demand,
proliferation of atms and debit – cards, decreasing npas due to securitization,
improved macro economic conditions, diversification, interest rates, regulatory and
policy changes (e.g. A risk management to the banking regulation act). Certain trends
like growing competition, product innovation and branding, focus on strengthening
risk management system, emphasis on technology have emerged in the recent past.
Larger banks would have a relatively advantages, here recently the union cabinet on

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15-02-2017 approved the merger of states bank of india with five of its associate
banks including states bank bikaner and jaipur, states bank of travancore. The merger
is likely to result in recurring savings, estimated at more than rs 1,000 crore in the first
yea, through a combination of enhanced operational efficiency and access to sbi‘s
global network. There are currently 27 public sector banks in india out of which 19
are nationalized banks and 6 are sbi and its associate bank, and rest two are
nationalized banks bhartiya mahila bank, which are categorised as other public
sector banks, 23 private sector banks and 46 foreign banks with 325 branches (as on
31st dec. 2015), 61 regional rural banks (rrbs) and more than 90,000 credit
cooperatives.

3.6 Structure of banking in India:

As per section 5 (b) of the banking regulation act 1949, ―means the accepting, for the
purpose of lending or investment, of deposits of cheque, draft, order or otherwise.‖
All banks which are included in the second schedule to the reserve bank of india act.
1934 are scheduled banks. These banks comprise schedule commercial banks and
scheduled cooperative banks schedules commercial banks in india are categories into
five different groups according to their ownership or nature of operation. These banks
groups are:

1. States bank of India and its associates,

2. Nationalized banks,
3. Regional rural banks,
4. Foreign banks and
5. Other indian schedule commercial banks (in the private sector).

3.7 Banking reforms in india:

 In august 1991, the government appointed a committee under the chair of m.

Narasimha, which worked for the liberalization of banking practices. The aim
of this committee was to bring about ―operational flexibility‖ and ―functional
autonomy‖ to enhance efficiency, productivity and profitability of banks. The
committee submitted its report in november 1991 and the following
recommendations were given:

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 Establishment of a four-tier hierarchy for the banking structure consists of

three to four large banks with sbi at the top.
 The private sector banks should be treated equally with the public sector banks
and government should contemplate to nationalize any such bank.
 The ban on setting new banks in private sector should be lifted and the
licensing policyin the branch expansion must be abolished.
 The statutory liquidity ratio and cash reserve ratio should be progressively
brought down from 1991-92.
 The directed credit program should re-examine and the priority sector should
be redefined to comprise small and marginal farmers, the tiny industrial sector
business operators and weaker sections.
 Banking industry should be deregulated to suit the market conditions.

 The competition in lending between dti‘s (development of financial

institutions) and banks should be increase and a shift from consortium lending
to syndicated lending should be made.
 In respect to doubtful debts, provisions should be created to the extent of 100
percent of the security shortfall.
 The government share of public sector banks should be disinvested to a
certain percentage like in case of any other psu.
 In order to initiate the second generation of financial sector reforms, a
committee on banking sector reforms (bis), again under the chairmanship of
m. Narasimha submitted its reports on 23rd april 1998 to the finance minister
of govt. Of india. Narasimha committee ii report had observed that rbi‘s role
should be separated from being monetary authority to that of regulator of the
banking sector. The major recommendations of the second narasimha ii report
were as follows:
 The committee favoured the merger of strong pubic sector banks and closure
of some weaker banks if their rehabilitation was not possible.
 It recommended corrective measures like recapitalization is undertaken for
weak banks and if required such banks should be closer down.
 The committee had also suggested on amicable golden handshake scheme
banking sector staff.

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 Suggesting a possible short-term solution to weak banks, the report observe

the narrow banks could be allowed as a mean of facilitating their
rehabilitation.
 Expressing concern over rising non-performing assets, the committee provides
the idea of setting up an assets reconstruction fund to tackle the problem of
huge non – performing (npas) of banks under public sector.

Government had so taken into account the establishment of the board for financial
supervision (bfs) as the apex supervisory authority for commercial banks, financial
institutions and non-banking financial companies rating system, corporate
governance,enhanced due diligence on important share holders, fit and proper tests for
directors, and setting up of indian financial network (infinf) as the communication
backbone for the financial sector, introduction of negotiated dealing system (nds) for
screen-based trading in government securities and real time gross settlement (rtgs)
system.

3.8 Recent trends in the banking system:

Electronic payment services – e - cheques: in the recent days we are aware of e-

governance, e-mail, e-commerce, e-tail, etc. In the same manner, a new
technology is being developed in us for introduction of e-cheque, harbinger to the
introduction of e- cheque, the negotiable instruments act has already been amended to
include, truncated cheque (a substitute electronic form for paper cheque) and e-
cheque instruments.

1. Real time gross settlement (rtgs):

Real time settlement system, introduced in india since march 2004, is a system
through which with the help of internet instructions can be given by banks totransfer
of funds from on bank account to another bank account. The rtgs system is
maintained and operated by the rbi and provides a means of efficiency and faster
funds transfer among banks facilitating their financial operations. As the name
suggests, funds transfer between banks takes place on a ‗real time‘ basis. Therefore,
money can reach the beneficiary‘s account within two hours.

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2. Electronic funds transfer (eft):

It is a system whereby anyone who wants to make payment o another person /

company etc. Can approach his bank a make cash payment or give instruction /
authorization to transfer funds directly from his own account to the bank account of
the receiver / beneficiary. Complete detail such as the receiver‘s name, bank account
number, account type (savings or current account), bank name, city, branch name
etc. Should be furnished to the bank at the time of requesting for such transfers to
that the amount reaches the beneficiaries‘ account correctly and faster. Rbi is the
service provider of eft.

3. Electronic clearing service (ecs):

It is a retail payment system that can be used to make bulk payments / receipts of
similar nature especially where each individual payment is of repetitive nature and of
relatively smaller amount. This facility is meant for companies and government
departments to make / receive large volumes of payments rather than for funds
transfers by individual

4. Automatic teller machine (atm):

It is the most popular devise in india, which enables the customers to withdraw their
money 24 hours a day 7 days a week. It is a devise that allows customer who has an
atm card to perform routine banking transactions without interacting with a human
teller. In addition to cash withdrawal, atms can be used for payment of utility bills,
funds transfer between accounts, deposit of cheques and cash into accounts, balance
enquiry etc.

5. Point of sale terminal:

It is a computer terminal that is linked online to the computerized customer

information files in a bank and magnetically encoded plastic transaction card that
identifies the customer to the computer. During a transaction, the customer‘s account
is debited and the retailer‘s account is credited by the computer‘s account is debited
and the retailer‘s account is credited by the for the amount of purchases.

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6. Tele – banking:

It facilitates the customer to do entire non-cash related banking on telephone. Under

this devise automatic voice recorder is used for simpler queries and transactions. For
complicated queries and transactions, manned phone terminals are used.

7. Electronic data interchanges:

It is the electronic exchange of business documents like purchase order, invoice,

shipping, notices, receiving advise etc. In a standard computer processed, universally
accepted format between trading partners. Edi can also be used to transmit financial
information and payments in electronic form.

8. Net banking:

It is done through internet by individuals and firms for transfer of funds, booking
rail tickets, shopping, purchasing cinema tickets, purchasing shares etc.

9. Mobile banking:

Mobile banking is a service provided by a bank or other financial institution that

allows its customers to conduct a range of financial transactions remotely using a
mobile device such as a mobile phone or tablet, and using software, usually calledan
app, provided by the financial institution for the purpose.

10. Amalgamation of banks:

The consolidation of banks is known as amalgamation of banks. Recently the union

cabinet on 15-02-2017 approved the merger of sates bank of india with five its
associate banks for efficient enhanced operational efficiency and reduced cost of
funds.

3.9 Challenges:

1. Non – performing assets (npas): today, is the era of globalization banks have
cope with the competitive forces and strengthen their balance sheet. Now a days,
banks are groaning with burden of npas. If npas are not recovered, they will be

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banking industryis the high transaction cost of carrying non-performing assets in their
books. The resolution of the npa problem requires greater accountability on the part
of the corporate, greater disclosure in the case default, an efficient credit information
sharing system and an appropriate legal framework pertaining to the banking system
so that court procedures cam be streamlined and actual recoveries made within an
acceptable time frame. The banking industry cannot afford to sustain it self with
such high levels of npa‘s thus. ―lend, but lent for a purpose and with a purpose ought
to be the slogan for salvation.‖
2. Information technology (it) in banking: indian banking industry, today is in
the midst of an it revolution. A combination of regulatory and competition reasons has
led to increasing importance of total banking automation in the indian banking
industry. Information technology has basically been used under two different avenues
in banking. One is communication and connectivity and other is business process
reengineering. Information technology enables sophisticate‘s product development,
better market infrastructure, implementation of reliable techniques for control of risks
and helps the financial intermediaries to reach geographically distant and diversified
markets.
3. World wide banking (wwb): as an extreme case of e- banking world wide
banking (wwb) on the pattern of world wide web (www) can be visualized. That
means all banks would be interlinked and individual bank identity, as far as the
customer is concerned, does not exist.
4. Cyber crime: today the major cybercrimes which plague the banking sectors
are atm frauds, hacking of bank accounts, denial of service, credit card frauds,
phishing

etc. Are challenges to the banking industry. The rapid growth to global
electronic crimeand complexity of its investigation requires a global presence.

5. Future outlook: banking landscape is changing very fast. The reserve bank
in its bid to move towards the best international banking practices will further
sharpen the prudential norms and strengthen its supervisor mechanism. There will be
more transparency and disclosures.

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3.10 Strategies implemented by banking industry

1. Optimizing the mobile experience:

Traditionally, bank have learned on their physical branch locations to be the primary
touch point of engagement with their customer. But with the explosion of smart
phones and associated application, customers are much more inclined to complete
their banking online whenever possible. With this in mind, having mobile – friendly
banking experience coupled with application that aid the customers financial life will
be strategically paramount for banks to retain their current customer, and attract new
ones. A mobile strategy is no longer a nice to have for banks – it is now a necessity
for those who hope to remain competitive for years to come.

2. Mobile payment:

Mobile payment is becoming much more pervasive throughout the consumer

economy. Services like apple pay and google wallet have paved the way for the
banking industry in this arena, as consumers, having had these services offered on
their phones off the shelf for years, are becoming more comfortable with the security
of this method of payment. Chase bank recently announced that it will be rolling out
its own mobile payment offering for its customers, and one would expect similar
financial institutions to follow suit soon.

3. Security and authentication

These trends build on the previous two, as security and authentication will become
significant strategic challenges as consumer continue to adopt the mobile ecosystem
foe their banking needs. Banks will have to take a closer look at how they confirm
the identities of their customers who are accessing accounts remotely. With security
breaches and identity theft on the rise, the protection and security of banking
information is paramount to instilling trust in the minds of consumers, so banks will
have to devise strategic plans accordingly to ensure the safety of all their customer‘s
financial data.

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4. The continued rise of technology disruption fintech

Experts do not anticipate new financial technologies to take substantial market share
from the banking industry as a whole, but it does pose a significant strategic challenge
to the industry given its recent cost – containment and growth struggles. Fintech is
software that serve to displace some of the most profitable offerings of a traditional
bank like financial advising, loan alternatives, payment processing, and money
transfers. Additional, fintech includes very disruptive innovations like crypto –
currency, which threatens the underpinning of the banking industry as a whole. As
fintech companies continue to innovate and challenge the status quo of the banking
industry, there may be a groundswell of further peril. Look foe banks to make
strategic manoeuvres to ward off competition from fintech, such as building
competitive products in-house or acquiring these companies to add their portfolio of
offerings.

5. Use of multiple channels to reach new customers

With the increased pressure on new customer acquisition across the industry, banks
have to become more innovative in their acquisition strategies. One area that is
projected to yield significant return on investment is multichannel marketing. Using a
combination of traditional, digital, and social channels, banks can expand their
marketing reach and get their messaging in front of the cohorts of new customers they
hope to attract.

3.11 Security measures for banks from cyber fraud

1. Strong passwords use: use separate / id password combinations for different

accounts and avoid writing them down. Make the passwords more complication by
combining letters, numbers, special characters, and by changing passwords on a
regular basis.
2. Secure your mobile devices:

Be aware that your mobile device is vulnerable to viruses and hackers. Download
applications from trusted sources. Do not store unnecessary or sensitive information
on your mobile device. It is also important to keep the device physically secure;

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millions of mobile devices are lost each tear. If you do lose your device, it should
immediately be reported to your carrier and / or – organisation. There are some
devices that allow remote erasing of data. Be sure to keep your mobile device
password protected.

3. Install the latest operating system updates:

Keep your application and operating system with the latest system updates. Turn on
automatic updates to prevent potential attacks on older software.

4. Protect your data:

Use encryption for your most sensitive files, such as health records, tax returns, and
financial records. Make regular back – ups of all your important data.

5. Secure your wireless network:

Wi-fi (wireless) network at home are vulnerable to intrusion if they are not properly
secured. Review and modify default settings. Public wi-fi, also known as ―hot sports‖,
may be vulnerable. Avoid conducting sensitive transactions on these networks.

6. Protect your e-identity:

Be cautions when giving out personal information, such as your name, address,
telephone number, or financial information on the internet. Make sure that website is
secure, especially when making online purchases, or that you have enabled privacy
settings for (for example: when accessing/using social networking sites, such as face
book. Twitter, you tube, etc) once something is posted on the internet, it may be there
forever.

7. Avoid being scammed: never reply to emails that ask you to verify your information
or confirm your user id or password. Don‘t click on a link or file of unknown origin.
Check the secure of the message; when in doubt, verify the source.

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CHAPTER– 4

CASE STUDIES ON CYBERCRIME ON BANKING SECTOR

4.1 Case-01: online credit card fraud on e- bay

Bhubaneswar: rourkela police busted a racket involving an online fraud worth rs

12.5 lakh. The modus operandi of the accused was to hack into the ebay india
website andmake purchases in the names of credit cardholders.

Two persons, including alleged mastermind debasis pandit a bca student, were
arrested and forwarded to the court of the sub divisional judicial magistrate, rourkela.
The other arrested person in rabi narayana sahu.

Superintendent of police d.s. kutty said the duo was later remanded in judicial
custody but four other persons allegedly involved in the racket were untraceable. A
case has been registered against the accused under section 420 and 34 the indian penal
code and section 66 it act and further investigation is on, he said.

While pandit, son of retired employees of rourkela steel plant, was arrested from his
sector 7 residence last night, sahu, his associate and constable, was nabbed at his
house in uditnagar.

Pandit allegedly hacked into the ebay india site and gathered the details of around 700
credit cardholders. He then made purchases by using passwords.

The fraud came to the notice of e bay officials when it was detected that several
purchases were made from rourkela while the customers were based in cities such as
bangalore, baroda and jaipur and even london, said v. Naini, deputy manager of
ebay. The company brought the matter to the notice of rourkela police after some
customers lodged complaints. Pandit used address of sahu for delivery of the
purchases goods, said police. The hand of one satya samal. Recently arrested in
bangalore, in suspected in the crime.

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Samal had booked a room in a bangalore hotel for three months. The hotel and
transport bills rose to rs lakh, which he did not pay.

Samal was arrested for non-payment of bills, following which pandit rusted to
bangalore and stood guarantor for his release on bail, police sources said.

Introduction

These kinds of online fraud happen of ten so in bhubaneswar rourkela police basted a
racket involving an online fraud worth rs 12.5 lakh, hackers used to purchases in the
name of other credit card holders.

So here the two students‘ names as debasis, pandit, a bca student were arrested and
forwarded to the court of the sub divisional / judicial magistrate and the other arrested
person is robi narayan sahu.

The fraud came to the notice that it was detected that several purchases were made
from rourkela. While the customers were based in cities such as bangalore, baroda
and jaipur and even london, said v. Naini deputy manager of ebay.

So company took over the matter notice of rourkela police after some customers
lodged complaints. The gang was also involved in train fight and hotel reservation.

Samal was arrested for non-payment of bills, following which pandit rushed to
bangalore and stood guarantor for his release on bail, source said.

Swot analysisstrength:

1. Credit card avenues verify and validates credit cards of buyer for over thousand e-
commerce websites.

2. Checking process was carries on e-bay hackers through credit cards on ip mapping,
zip mapping numbers.\
3. Credit and card fraudulent will be charged for cheating under section 420.

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Weakness:

1. Fraudulent misused the identities of customers and in bhubaneswar was rourkela

police fought.
2. Legal notices came back unclaimed.

Opportunities:

1. Action could have been taken regarding legal notice claimed by the victims.
2. Credit card details availability in internet could have been avoided.
3. Credit cards security team could have taken special action before providing license
for a fraudulent.

Threats:

1. The fraud came to the notice of e-bay officials when it was detected that several
purchases were made from rourkela.
2. Hacking into the e-bay india website and make purchases in the names of credit
cardholders.

4.2 : case-02: indian websites are target of hackers

Some computer experts managed to break into the write security computer network of
bhabha research centre but were luckily detected.

“gforce,” a group of anonymous hackers whose members write slogans critical of

india and its claim over kashmir, have owned up to several instances of hacking of
indian sites run by the indian government,

Private companies or scientific organisations. The naascom chief said indian

companies on an average spent only 0.8 percent of their technology budgets on
security, against a global average of 5.5 percent.

A number of cases of hacking of indian internet sites have been traced to pakistan but
it would be difficult to nail them, cbi director, r k raghavan said. As the hackers
who broke into computer system in indian were not conniving with the pakistan law
enforces, ―one wonders what kind of cooperation we will get ―mr. Raghavan said at a

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seminar on internet security. Hackers using knowledge of software to break in and

steal information from computer system broke into at least 635 indian internet sites
last year. Mr. Raghavan said the rise of literacy in india could bring down
conventional crimes but the vulnerability of computers and the internet could make
crimes over the medium more rampant.

―we at the cbi are convinced that cyber crime is the crime of the future. ―he said.
―it isnow much more easily committed and less easily identified.‘ president of india‘s
national association of software and service companies (naasscom), dewang mehta
said the lack of uniform laws of cross-border hackers difficult. ―hacking is not a
universal offence, and there is a problem.‖ Mr. Mehta said.

Last year. India passed a landmark digital law that makes hacking, spreading of
viruses and illegal financial transaction over the internet punishable. It became the
12th member ina small club of nations with digital laws.

It was reported that pakistan was making use of the computer system promote
terrorism in india. These are just some of the instance which were cited by bhure lal,
secretary in the central vigilance commission, to make a strong case for implantation
of cyber laws he the central bureau of investigation (cbi) in the capital today.
Underlining the need for a comprehensive cyber law, he added that computer abuse
can be resorted to for cyber – terrorism.

In order to evolve effective safeguards against the menace of computer crimes, other
expert‘s various investigation agencies, including the federal bureau of investigation
(fbi) and interpol, today sought specific and comprehensive cyber laws to cover all
actsof computer criminal and proactive mechanism for tackling such offences.

It is not only difficult to detect computer crimes but also to book criminals since the
laws have not kept pace with technology, ―reserve bank of india deputy governor s.p
talwar said.

Stressing the need for effective security features while undertaking computerization,
he said it is often difficult to attribute guild using the existing statutes since the act of
trespassing into a system and tampering with virtual data may not necessarily be

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 ―A Study On Impact Of Cyber Crime In Banking Sector‖

specifically provided for in law.‖

In his address, cbi director r. K raghavan said the government is aware of the need for
legislation in this new area of information technology and accordingly, the department
of electronics (doe) in consultation with other experts‘ agencies has already drafted
laws relating to this area. Realizing the threat from computer crimes, the cbi has taken
a proactive‖ lead in preparing itself to face the challenge by setting up a special cyber
crime unit, he said.

At the same time, he added that unless development of security features were also
attended to at the same level of efficiency and equal speed, banks would be left
with beautiful software system for public glare and access, but totally unguarded and
gullible against waiting information poachers.‖

Introduction

So here in this case some computers experts managed to break into the high security
computer network of bhabha atomic research centre but were luckily detected.

A group of ―gforce‖ anonymise hackers whose members write slogans critical of

india and its claim over kashmir, have owned by hacking different sites.

So, the naascom chief said indian companies on an average spent only 0.8
percentage of their technology budgets average of against a global average of 5.5.
Percent

A no. (trackers) cases of been hacking to indian internet sites have been traced to
pakistan but it would be difficult to sort them. Hackers just use knowledge of software
to break in and steal information from computer system broke into at least 635
indian internet siteslast year. President od indian national association of software and
service companies, in order to evolve effective software against the menace of
computer crimes, other expert‘s various investigation agencies including the federal
bureau of investigation, and interpol. Rbi was also association with the efforts of the
ministries of finance, commerce and law in the enactment of laws such as the
information technology act the cyber law.

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SWOT ANALYSIS

STRENGTH:

1. No. Of cases of hacking of indian internet sites have been traced.

2. Hackers using knowledge of software to break in and steal information from
computer system.

WEAKNESS:

1. A group of hackers and pakistan was making as of this computer system to promote
terrorism in india.
2. These should strong case for implementation.

OPPORTUNITIES:

1. Evolve effective safeguards against the menace of computers.

2. Specific and comprehensive cyber laws to cover all acts of computer criminal and
practices, mechanisms for tackling such offences.

THREATS:

1. It is not only difficult to detect computer crimes but also to book criminals since the
laws have not kept pace with technology.
2. Stressing the need for effective securely features
while understandingcomputerization.

4.3 : Case-03:Tamil tiger credit card scam spread toChennai India

The Sri Ramachandra medical collage police at porur, Chennai, g. Elango, a tamil
tiger agent carrying a british passport, on friday seized 28 atm cards in his possession.
The police said elango illegally withdrew over rs. 30lakhs from the atm centres of a
few nationalized banks and a private bank. The amount was then sent to the united
kingdom through unauthorized channel. It is learnt that the chennai police was alerted
by a civilian who had seen elango using several atm cards to withdraw money from
an atm centreof a private bank on mount – poonamallee road, porur.

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A police team led by the assistant commissioner police balasubramanian caught

elango red- handed while he was withdrawing money from the atm machine.

G. Elango (38) of middlesex, united kingdom, is a shareholder in thamilini—a cash

andcarry grocery shops operating by he tamil tigers un uk.

Elango is from valvetiturai, a notorious port for smugglers in the sri lanka. He is the
partner of the lite‘s cash carry centres of thamilini in london – one in croydon and
another in southall.

After the arrest police has found, besides the atm cards, registration certificate books
of two cars, a cellular phone and a passport. Tamil nadu police is now seeking the
assistance of the scotland yard to obtain more information about elango. The tamil
tigers are also under investigation in uk for operating credit card rackets in europe.

Introduction

Here in this case sri ramachandra medical college police has arrested g. Elango, a
tamil tiger agent carrying a british passport, and have seized more than 28 ‗atm card
in his possession. The police law the notice that elango has withdrawn over rs. 30
lakhs fromthe atm centres of a few nationalizes banks.

A police team led by the assistant commissions police balasubramiam caught elango
red handed while he was withdrawing money from the atm machine.

A notorious port for smuggles less in the north of sri lanka. He is the parties of the
ltte‘s cash and carry centres. After the arrest police has found, besides the atm cards,
registration certificates books of two cards a cellular phone and a passport.
Tamilandu police is now seeking the assistance of the scotland yard to obtain more
information about elango.

SWOT ANALYSIS

STRENGTH:

1. Cops arrested g. Elango, a tamil tiger agent.

2. Chennai police was alerted by a civilian who had seen elango using several atm
cards to withdraw money from an atm.

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WEAKNESS:

1. Banks have become vulnerable against cyber-attacks.

2. Banks are struggling with security issues.

OPPORTUNITY:

1. Bank transfer codes must be secured.

2. Strong password can be created.

THREATS:

1. He (elango withdraw more than Rs. 30 lakhs.

2. Using several atm cards to withdraw money from an atm centre of a privatebank.

4.4 : CASE-04: CITY PRINCIPAL SEEK POLICE HELP TO STOP

CYBER

Principal across the city seem to be taking a cue from principal of Bombay
Scottish School, Mahim. After student began posting insult against him on Orkut,
instead of punishing have decided to bring in the cyber cell police to speak at their
school. They feel student and parents need to be educated against the legal and
moral consequences ofcybercrime.

Admitting to the existing of some mischievous student who misuse the internet
and also stray role educating students and warning them. Principal Rekha
Vinayak, GHK School,

misusing the freedom and hence needed to be monitored. Monitoring and

educating students against the pitfalls of visiting restricted sites is the
responsibility of parents. However, the school too has to play an active role,‖ she
said.

Principal Alka Lokre of J M Bajaj school, Nagothane concurred. ―students need to

be oriented with soul researching and conscience questioning which will help

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restrain them from misusing modern amenities. ―she said. As a solution, principal
Fr Dr Francis Swamy of Holy Family school, Andheri, said that apart from
educating student, parents and teachers also needed to be roped in for the success
of any initiative against internet abuse. ―without the support of parents, no
awareness programme can success. Parents need to be sensitised to the problem on
hand and be active in stopping their children from maligning anyone,‖ he said.

Principal Paul Machado of Campion school went further, highlighting the long-
term effect of such uncontrolled freedom to student. ―parents must understand
that today their children are misusing the internet to abuse others. Tomorrow,
they may become victims of it too. Hence, parents need to be taken into
confidence too to stem this rot.‖ Apart from the above, all principals lauded the
move by Dr D P N Prasad, Bombay Scottish principal, to invite the cyber cell to
speak on cyber crime and said that they would also be inviting the cell officials to
speak on the subject in their schools.

INTRODUCTION

As on new many cybercrimes happen across the city and world. The Scottish
school, in Bombay has been relevantly facing the problems regard to this cyber
crime principal of Bombay Scottish school, has been began pasting insults against
him. On Orkut so he called up the cops to take information with the students, so
other school principle has too decided to bring police to their school. It self parents
and student should be Educated towards this cyber crime.

Now days things gone worst and student are misusing the Internet and also stray
into restricted sites due to lack of supervision, so the principles just decided only
cops can play as role in Educating the students.

Student had started misusing the freedom and hence needed to be monitored
―Monitoring and Educating student against the pitfalls of visiting restricted sites is
the main responsibility parents.‖

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The student should not use kind of sites, Andheri, said that a part from
educating students, parents, and teachers also needed to be roped in for the
success of any initiative against Internet abuse.

SWOT AnalysisStrength:
1. Monitoring and Educating Student against the pitfalls of visiting
restricted sites isthe responsibility of parents.
2. Parents should also be educated towards this cyber crime.

3. Parents must understand that today these children are misusing the
Internet to abuseothers.

Weakness:
1. Due to the unwanted streams and sites student are spoiled.

2. The education is must for student an parent towards this cyber crime

3. Unwanted sites should be banned and there should be kind of rules and
regulations.
Opportunity:
1. Students can surf healthy sites instead of restricted sites and make use
of.

2. Police, cops will certainly give tactic information as said by the

principles.

3. Educating parents also increases a great opportunity for the, upliftment

of thesociety.

Threats:
1. Cyber crime can lead to a mental disorder also student life can ruin
thoughrestricted sites.
2. Less educating towards the parents about cybercrime also a weakness.

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4.5 : CASE-05: UPI BANK HOOKED UP IN PHISHING ATTACK

Frauds of cyberspace have reared its ugly head, the first of its kind this
year, by launching a phishing attack on the website of Ahmadabad- based UTI
bank, a leading private bank promoted by India‘s largest financial institution.
Unit trust of India (UTI). A URI on GeoCities that is almost a facsimile
version of the UTI banks home page is reported to be circulating amongst
email users. The web page not only asks for the account holder‘s information
such as user and transaction login and password, it has also beguilingly put up
disclaimer and security hazard statements.

In case you have received any e-mail from on address appearing to be sent by
UTIBANK, advising you of any changes made in your personal information,
account details or information on your user id password of your net banking
facility, please do not respond.It is UTI Bank‘s policy not to seek or send such
information through email. If you have already disclosed your password please
change it immediately.‖ The warning says. The tricky link is available on
http://br.Grocities

If any unsuspecting account holder enters his login id, password, transaction id
and password in order to change his details as ‗as advised‘ by the bank, the
same info is sent vide maolform.cz (the phisher‘s database).

After investigation, we found that mail form is a service of PC Svet, which is a

part of the Czech company PES can be Consulting. The Webmaster of the site
is a person named Petr Stastny whose e-mail can be found on the web page.

Top officials at UTI Bank said that they have reported the case to the
economic office wing, Delhi Police. The bank has also engaged the services of
Melbourne international a leading anti-phishing company that phishing
monitoring and take -down solution. ―we are now in the process of closing the
site. Some of these initiatives take time, but customer have been kept in the
loop about these initiatives, ―said V K Ramani, president – IT, UTI Bank.

As per the finding of UTI Banks security department, the phishing has sent

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more that 1,00,000 emails to account holders of UTI Bank as well as other
banks. Though the company has kicked off damage control initiatives, none of
the initiatives are cent percent fool proof,‖

Now there is no way for banks to know if the person logging -in with accurate
user information is a fraud,‖ said Ramani. However, reliable sources within the
bank and security agencies confirmed that the losses due to this particular
attack were zilch. The bank has sent alert to all its customers informing about
such, malicious websites, besides beefing up their alert and fraud response
system. ―Engaging professional companies like fraud watch help in reducing
time to response ton attacks,‖ said Sanjay Has war, Assistant Vice President,
Network and Security, UTI Bank.

INTRODUCTION
A phishing attack on the website of Ahmedabad based UTI banks, an hacking
of commercial banks OTI Bank, a leading private bank promoted by India‘s
largest financial institution.

The web page not only asks for the account holders‘ information such as user
and transaction login and passwords. It has also beguilingly but up disclaimer
and security hazard statements.

Every bank gives just certain information that if you just review any e-mail
from an address appearing to be sent by UTI BANK advising that you need to
change details or information on your uses ID and password of your net
banking facility.

So as per the finding of UTI bank‘s security department, that100,000 emails to

account holders of UTI Bank as well as other banks. The even also sent alerts
to all its customers informing about such malicious websites, besides beefing
up this alert and fraud response system.

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SWOT AnalysisStrength:
1. Without any accurate account information, one should not change
their personalinformation account detail‘s or information advising you
of any changes.
2. Any unsuspecting account holder enters his login ID password in
order to changehis details.

Weakness:

1. Without the advancement or notifying by the bank one should not

disclose theinformation password to any one.

2. The fishing has been hacked more than 100,000 and sent through
email of accountholder.

Opportunity:

1. We are now in the process of closing the sites some of these initiations
take time.

2. ―Customer have been kept in the loop about these initiatives‖Threats:

1. The bank has sent alerts to all its customers informing about such
maliciouswebsites, besides beefing up this alert and fraud response
system.
2. Engaging professional companies like fraud watch help in reducing
time to respondto attacks.

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Chapter- 05

FINDINGS, SUGGESTIONS, CONCLUSION

In this chapter the attempt is made to explain the major findings on cybercrime in
banking sector and to suggest overcoming these problems and giving suitable
conclusion to banking for sustainable development.

5.1 Findings

 Banks are being focused again and again on the grounds that every one of the
storesas money are held with the banks.
 The security of the clients is at a colossal hazard since it has turned out to
beanything but difficult to hack their own subtitles.
 The product utilized for recognising fakes as a rule is either obsolete or
extremelytedious.
 The quantity of cases fathomed by the digital cell has remained reliably low.
 Frauds misused the identities of customers and purchased services with the
usage ofcredit card details which were found on the net
 Bank transfer codes must be secured
 Students can surf healthy sites instead of restricted sites and make use of
 Engaging professional companies like fraud watch help in reducing time to
respondto attacks.

5.2 Suggestions:

 Credit card fraudulent will be charged for cheating under sec, 420
 Action could have been taken regarding legal notice claimed by the victims.

 Specific and comprehensive cyber laws to cover all acts of computer criminal
andpractices mechanism for tracking such offences.
 Monitoring and educating student against the pitfalls of visiting restricted
sites isthe responsibility of parents.
 Without any accurate account information account details or information
advisingyou of any changes.

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 Without the advancement or notifying by the bank one should not disclose
theinformation password to anyone.

5.3 Conclusion

This gives a brief overview of cybercrimes scenario in the banking sector and
impact of cyber crime on bank finances. The major cybercrime which plague the
banking sector are atm frauds, denial of service, credit card frauds, phishing etc. The
rapid growth to global electronic crime and the complexity of its investigation
requires a global presence. Presently the measures undertaken the banks are not
sufficient and therefore it is imperative to increase cooperation among the banks
across the world for the development of tools and models which can be applied to
counter global banking cybercrime.

The hacker could live three continents away from its victim, and they wouldn‘t even
recognize they were banks, nor do they to be outside in order to commit any crime.
They have everything they need on their weapon aren‘t guns anymore; they attack
with mouse cursors and passwords.

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 Bibliography

Articles:

1. Shubhun kumar and uday kumar “present scenanio of cybercrime in india and
its preventions” volume 6, issue 4, april.2015 issn 2229-5518
2. Mrs. Vinaya chaturvedi “cybercrime technological bright in digital banking in
india" e-issn: 2278-487x, p-inns: 2319-7668.
3. S. Kumudha and awasthi rajan “a critical analysis of cyber phishing

And volume 119 no.17 2018, 1557-1567.

4. Simar, akshay manvikar, vaishnavi joshi, jatin guru and mrs. Shanit kiran
“cybercrime, a growing threat to indian banking sector issn 2394-3386 volume 5,
issue 1, january 2018.
5. A r raghavan and latha parthuiban “the effect of cybercrime on a bank’s
finances” issn:2347-3215 volume 2, february – 2014 pp.173-178.
6. Dr. M lokanadhe reddy and mrs. V bhargavi “cyber security attacks in banking
sector challenges and threats” issn2328-3734, issn (online) 2328-3696. Issn (cd-
rom) 2328-3688.
7. Sachin agarwal (2006) “cyber crime in banking sector” volume 3, (2016), may
issn 2455-2844.
8. Mr. Sourabh munjal and ms. Anooja. A “cyber crimes threat for the e-
commerce” outline issn 2394-4390.

Google search:

 www.cyberlawsindia.net/cases1.html
 Https://economictimes.indiatimes.com/cyber-crime
 Https://www.information-age.com/cyber-crime-banking-sector
 Https://www.google.co.in
 www.bdo.in>getmedia>cybersecurity
 www.the-future-of-commerce.com
 Https://www.in.com