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Cyber Crimes and Banking Frauds in India


Desk Team LawDocs

Cyber Crimes and Banking Frauds in India- We live in a world surrounded by technologies and Artificial Intelligence. The world under the shadow of technology and AI has been changing rapidly and in the very same fashion, the dynamics of this world is also changing with respect to the changes in the technology. However, there is always another side of the coin. The readers must’ve understood the other side of the coin that I wish to enumerate upon after reading the title of the article. 

When we talk about India and the legalities involved when it comes to Cyber Crimes and Banking Frauds,

the nation is still naïve with respect to the awareness. It is the very same lack of awareness which leads to the cybercrimes and banking frauds by the offenders with nefarious and malafide intentions. With the help of following points given below,

we would jog through the same and provide the readers with the basics of the same. 

Contents  hide 

1 Offences under Information Technology Act, 2000

1.1 Primarily, the offences are as follows:

2 Intermediary liability of Internet Service providers and compliance:

3 Cyber forensics and Law of Evidence:

3.1 The changes have been made and are as follows:

4 E-discovery and law:

4.1 At a high level, the process is as follows:

5 Blocking and interception:5.1 Recovering money from online banking frauds:

5.1.1 However, in case someone becomes a victim, here are the steps to follow:

5.2 Handling fake profiles on social media and matrimonial sites:

5.3 RBI ombudsman for digital payments:

6 Conclusion:

6.1 Related

Offences under Information Technology Act, 2000

As it has been mentioned above, the dark side of the technology harbours various kinds of cyberattacks and frauds as such. To avoid these kind of activities and to identify such activities, The Information Technology Act, 2000 was enacted in the country. Under this particular Act,

an array of subjects are covered which has been divided into chapters and then sections and further into sub-sections. However,

for the sake of the readers, we shall restrict ourselves to the offence related part of the IT Act, 2000.

Chapter IX of the IT At, 2000 deals with the offences under the purview of this act following with the punishments related if the mentioned offences have been committed. There have been various offences undertaken under the IT Act, 2000. These includes Section 43 which talks about the Penalty and compensation for damage to computer, computer system et cetera. Section 43 A which speaks about compensation for failure to protect data are some of the major highlights. 

Primarily, the offences are as follows:
  • Section 65 talks about the tampering of computer source documents.
  • Sections 66 talks about the computer related offences, which also takes into cognizance words like ‘dishonestly’ from Section 24 of the Indian Penal Code and ‘fraudulently’ from Section 25 of the Indian Penal Code. 
  • Section 74 covers publication for the fraudulent purposes.
  • Section 76 covers confiscation.  

Intermediary liability of Internet Service providers and compliance:

When a crime is committed, a lot of factors are involved in that, in the very same manner,

when a crime is committed via online medium(s),

especially the frauds, intermediaries play a vital part in that. Now the readers must think about the role of intermediaries and the role of Internet Service Provider as such. But before that, let us understand what does intermediary mean under the Section 2(1)(w) of the IT Act of 2000. 

“Intermediary with respect to any electronic messages means any person who on behalf of another person receives, stores or transmits that messages or provides any service with respect to that messages and includes:

  • Telecom service providers;
  • Network service providers;
  • Internet service providers;
  • Web hosting service providers;
  • Search engines;
  • Online payment sites;
  • Auction sites;
  • Online market places; and
  • Cyber cafes”

As it is clear from the above definition, intermediaries are those who receive and store the information and then forward it to the concerned organization or

the platform if the consent has been granted. In particular, under this sub-heading we would focus on the ISP or the Internet Service Provider who act as an intermediary as well. Now,

there are various crimes that could be committed by the intermediaries when they store so much information of their users.

The question comes, what exactly could they do wrong and if they do wrong, what are the exceptions as such?

With the plethora of information, the ISPs could sell the information obtained from their clients in exchange of high monetary returns. This is equivalent to the breach of privacy and

it could ultimately lead to infringement of the Right of Privacy covered under Article 21 of the Indian constitution as a fundamental right. 

In order to regulate such activities, under the IT Act of 2000, certain provisions have been made. These have been primarily mentioned under

Chapter IX, Section 67 C and Chapter XII, Section 79 (intermediaries not to be liable in certain cases). Furthermore, the excuse of illegal and unlawful activities doesn’t protect the intermediaries from escaping the liability of the offence committed.

Cyber forensics and Law of Evidence: 

We all have heard the term forensics in our lives, with respect to the investigation carried out by the police when a crime has been committed. In the very same manner, there is something known as cyber forensics. Cyber forensics is a branch of forensics relating to computer based evidences, their storage, collection and admissibility. As it has been mentioned in a repeating manner about the dark side of the technology and AI,

it became important for the amendments under The Indian Evidence Act of 1872 to cope up with the changing crime dynamics and

finding a way on how to incorporate them into the present legal system.

The changes have been made and are as follows:

  • Section 3 of the Indian Evidence Act of 1872 talks about evidence, that includes the evidence which has been stored electronically as well.
  • Section 17 of the Indian Evidence Act of 1872 talks about the admission which could be either oral or documentary or contained in an electronic form. 
  • Sections 34 of the Indian Evidence Act of 1872 speaks of the entries in books of account including those maintained in an electronic form when relevant. 
  • Section 39 of the Indian Evidence Act of 1872 talks about the type of evidence to be given when statement forms a part of a conversation, document, electronic record, book or series of letter or papers.
  • Section 47A of the Indian Evidence Act of 1872 speaks about the opinion of the third person about the electronic signature when relevant.
  • Sections 88A of the Indian Evidence Act of 1872 takes into cognizance the presumption as to electronic messages. 
  • Section 90A of the Indian Evidence Act of 1872 talks about the presumption as to electronic records five years old. 
  • Section 131 of the Indian Evidence Act of 1872 talks about the production of documents or electronic records which another person, having possession could refuse to produce. 

E-discovery and law:

eDiscovery is short for electronic discovery, which is define as the process of discovery in civil litigation that is carry out in electronic formats. It encompasses what most often is refer to as electronically store information, or ESI.

Examples of the types of ESI included are emails, instant messaging chats, documents, accounting databases,

CAD/CAM files, Web sites, and any other electronic information that could be relevant evidence in a lawsuit.  Also included in eDiscovery are “raw data” and “metadata,” which forensic investigators can review for hidden evidence.

As a practice, eDiscovery runs from the time a lawsuit is foreseeable to the time the digital evidence is present in court.

At a high level, the process is as follows:
  • Data is identify as relevant by attorneys and place on legal hold.
  • Attorneys from both sides determine the scope of discovery, identify the relevant ESI, and make eDiscovery requests and challenges. Search parameters can be negotiate with an opposing counsel or auditor to identify what is being search and to ensure need evidence is identify and non-evidence is screen out,
  • thereby reducing the overall effort required to search, review, and produce it.
  • Evidence is then extract and analyse using digital forensic procedures and is usually convert into PDF or TIFF form for use in court. It often can be advantageous to use pattern and trend identification and other analytical search techniques here so these tasks can be performed more efficiently and make less use of expensive human resources.

Blocking and interception:

The Right to Freedom of Speech and Expression is mistake as an absolute right by certain individuals in the nation. However, they keep forgetting the fact that it is restrict right which comes with reasonable restriction. In the very same manner,

if an individual or individuals indulge in such nefarious and malafide activities which proves to be a threat for the sovereignty of the nation,

then the GoI (Government of India) has the right to curb and block the information or

the misinformation being spread in order to garner hate and incite violence. These provisions have been cover under Section 69 and Section 69A of the Information Technology Act of 2000. 

Section 69 of the Information Technology Act of 2000 talks about power to issue directions for interception or

monitoring or decryption of any information through any computer resource. Whereas,

Section 69A of the Information Technology Act of 2000 talks about the Power to issue directions for blocking for public access of any information through any computer resource. One must understand that the GoI can do that only when it is in the interest of the sovereignty and

integrity of India, defence of India, security of State, friendly relations with foreign states or public order or

for preventing incitement to the commission of any cognizable offence relating to the above mentioned conditions. 

Recovering money from online banking frauds:   

It is not new for most of the people living in this nation to be the victim of online banking frauds. It is very simple for the fraudsters to trick the simpletons and at times the wise people too when it comes to money. The fraudsters often impersonate themselves as the member of XYZ bank and

lure the customers with respect to them winning or them getting a certain sum of money and when it comes to money, people lose their conscious and

very simply give them all the necessary personal details required for the fraudsters to commit the banking frauds.

Now what if a person becomes a victim to such nefarious activity? The answer to this would be at the first stage,

never ever give your personal details to anyone when it comes to bank-related transfers. And even if you do, confirm it at least thrice before furnishing all your personal details.

However, in case someone becomes a victim, here are the steps to follow:
  1. Contact your bank immediately. Once the bank has been contact, report to the bank authorities that the transaction has been done fraudulently. 
  2. Block your card via mobile banking app or by contacting the bank. 
  3. Report this incident to the police and register an FIR. The police will then most probably file a case under Section 420 of The Indian Penal Code which is cheating.

So these are some steps that should be follow by the victim of the bank frauds. Now, when it comes to the recovery of the money,

if you have informed the bank about the fraudulent transfer and the money has not been taken out,

then the transfer usually is block. However, when it comes to the police investigation,

the amount would be refunded once and after the fraudsters have been caught. But just to avoid all this fiasco,

One Time Password or OTP is something which has been made mandatory before any kind of monetary transfer(s). Hence, the user or customer must not share the OTP with anyone else. 

Handling fake profiles on social media and matrimonial sites:

In the last sub-heading, we talked about people being victim to the banking frauds. However, it is not just that the people are being victim only to the banking frauds, people also become victim to the fake profiles present on the social media platforms

like WhatsApp, Instagram, LinkedIn et cetera and the matrimonial sites,

where they publish wrong information about them and induce people with the ultimate malafide intention of committing frauds and

gain money from the people who are the victims. 

Now the question comes, how to tackle such encounters. First of all, it is necessary for the people to identify the person and then start talking. Checking for mutual, doing a quick background check by visiting the profile of the person are some preventive measures. Now after a person has been make the victim of such issues,

the punishments and repercussions of the same has been mention under:

  • Section 66D of the Information Technology Act of 2000 which talks about Punishment for cheating by personation by using a computer resource. Further, Section 79 (3)(a) of the Information Technology Act of 2000 also takes into cognizance the matrimonial sites as they are the intermediaries mentioned under Section 3 of the Information Technology Act of 2000.  
  • If and all the person wishes to file an FIR, the case could be made under Section 420 and 419 of the Indian Penal Code coupled with Sections 415, 416, 417 and 418 of the Indian Penal Code. 

RBI ombudsman for digital payments:

The Reserve Bank of India on 31st January, 2019 had launched an Ombudsman Scheme for Digital Transactions (OSDT) as a redressal mechanism for the complaints with respect to the online payments. 

The Scheme, launched under Section 18 of the Payment and Settlement Systems Act, 2007, will provide a cost-free and

expeditious complaint redressal mechanism relating to deficiency in customer services in digital transactions conducted through non-bank entities regulated by RBI. Complaints relating to digital transactions conduct through banks will continue to be handle under the Banking Ombudsman Scheme. The offices of Ombudsman for Digital Transactions will function from the existing 21 offices of the Banking Ombudsman and

will handle complaints of customers from their respective territorial jurisdiction.

The Scheme provides for an Appellate mechanism under which the complainant / System Participant has the option

to appeal against the decision of the Ombudsman before the Appellate Authority.

In exercise of the powers conferred by Section 18 of the Payment and Settlement Systems Act, 2007, being satisfy that in the public interest and in the interest of conduct of business relating to payment systems, it is necessary to provide for a mechanism of Ombudsman for redressal of complaints against deficiency in services related to digital transactions,

the Reserve Bank of India hereby directs that,

the System Participants defined under the Ombudsman Scheme for Digital Transactions, 2019 shall come within the ambit,

and should comply with the provisions of the Ombudsman Scheme for Digital Transactions, 2019.


After going through the entire article, the readers must have got a slight idea with respect to the world of online frauds and the cybercrimes prevailing not just in the nation, but also the entire world. At times, these cybercrimes grow to such extent that their roots are track back to terrorism, which in turn takes the form of cyber terrorism. It is essential for the customers and the users to be aware of such things happening around them. For the better understanding,

an extensive awareness program should be launch and awareness should be spread amongst the users with respect to the growing trend of cybercrimes and banking frauds. However,

the onus is to be share by the citizens of the nation as well who actively participate in such activities and remain cautious. Then only it is possible for the nation to see a decline in such cases. 


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