NESS WADIA COLLEGE OF COMMERCE

(SUBJECT NAME) PROJECT

ON

 IMPACT ON PERFORMANCE OF BANKS DUE TO COVID 19

 CYBER CRIMES IN BANKING SECTOR
 COMPARATIVE STUDY PF NATIONALIZED COOPERATIVE
AND FOREIGN BANKS

by

Nitin chavan

S.Y.B.B.A

Div – B, Roll no. 109

Date of Submission :
 IMPACT ON PERFORMANCE OF BANKS DUE TO COVID 19

ABSTRACT

The COVID-19 pandemic adversely impacted various industrial sectors of India as well as
other countries across globe. In India, impact is resulting to a negative growth rate in
economy. Many sectors were performing good before the pandemic but now they have been
pulled down by this pandemic. So, it is very much required to analyze and cater the data
about those sectors which are badly impacted by pandemic, these sectors play vital role in
Indian economy. One of the most important sector of Indian economy is banking sector
which is responsible for all the financial activities going on in the country and working as a
supporting hand to all of the industries in term of financing, credit, transactions, collection
and payment and so on. There are so many reports containing numerous data are in public
domain stating the effects of this virus pandemic. The data is not only in physical form but
also it is scattered in various format over the internet. Though the data amount is enormous,
the major problem is to get the appropriate data according to the user needs. The databases
available online are being regularly updated but these databases are not able to provide
inference over the knowledge already stored. By using inference capability, we can fetch
latent and indirect information out of the knowledge base. Various ontologies for Covid-19
are available online but they do not focus on the performance of banking sector of India
during Covid-19.

INTRODUCTION
Indian economy basically depends on the three sectors namely primary sector, secondary
sector and tertiary sector and all the three sectors are being majorly supported by banking
sector. Banking sector is providing the financial support to all these sectors by disbursing
loans, advances, short term credits, issuing letter of credit, bank guarantees etc as its

traditional work. Apart from it the new phase of Indian Banking resembles in work

like providing forex support, digital banking, e-commerce, telebanking, e-kiosk and many
more. You cannot imagine rapid growing economy without banking support. If banking
sector get impacted by any obstacle its consequences will definetly be borne by all these
three sectors which are pillar of the Indian economy.

The havoc created by the world-wide pandemic COVID-19 toppled the complete economic
status of the brunt. The economy has been extremely affected due to COVID-19 Pandemic.
Reserve Bank of India; the Apex bank of India made necessary changes with the help of
expert in their policy for facing COVID-19 pandemic. Entire Indian Banking sector faced and
continue to face many challenges such as liquidity issue, Reserve Bank Of Indian reduced
REPO rate to name a few. Since people are struggling to receive income, Reserve Bank of
India decided to provide concession for paying EMI from customer by increasing the
period for re-payment.

The objective of the research paper is to study the changes RBI bought in its policy due to
COVID-19 and also in general how COVID-19 has impacted the Indian Banking Sector.
Further the solution is proposed for Indian Banking system to tackle the losses due to
COVID-19 Pandemic. The research found that Indian Banking system has added
various measures due to COVID-19 Pandemic to make Banking system smooth and
effective. Most of the Indian Banks were facing the problem of NPA, Non recovery of
loan, customer frauds, Bad Loans etc. and to add on to it COVID-19 has expedited the
collapse of Indian Banking business. No doubt banks are established in India with a
fundamental purpose to make profit by giving expected comfort to customers.

But Covid-19 has changed the scenario of Indian customers. Due to shut down of businesses
income source of the people came to halt. Then where lie the scope of availing loan
and repaying with interest. These challenges our Indian banks are facing in current
pandemic situation.

This pandemic appeared as “black swan event” that needs immediate government to help
resume economic stability through banking channel [1]. Based on approximation about
recovery time from this global pandemic various economic tools are pointing out
towards global economic depression of different dimensions. Covid-19 has affected the
economy of India at that time when the growth rate of the country was at lowest in last 10
year. In the recent past, Indian economy was trying to get on the track by recovering
with a slow rate.
However, due to this pandemic the recovery process is severely impacted. As in last two
quarters India has facing negative growth in GDP. The Indian economy was already
suffering even before the Covid-19 outbreak, but Covid-19 outbreak resulting it worsen
more. In a recent eport published by the RBI (India’s central bank) states that this
virus has impacted better companies, organizations and businesses that were performing
well before this pandemic. Figure 1: (a) % share in banking sector debt (b) debt in Rs lakh
crore.

Now, Banks have to minimize the risk and use the high risk-averse strategy to restructure
loans, provisioning bad debts due to less risk appetite, Indian banks have already suffered
severe losses in past restructuring attempts. The same report indicates that 19 sectors
are been adversely impacted by this pandemic resulting the stress of dept having value Rs
15.5 lakh crore which were not under the stress before this virus outbreak [2]. Fig 1 (a) and
(b) shows the adverse impact on % share in banking sector debt and debt in Rs lakh
crore respectively.

Therefore, investigation of the impact of Covid- 19 from the large amount of distributed data
is very vital to prevent the downfall of the economy and the minimize the pandemic effect. It
is also essential because this study will be used as a touch bearer in future if any of the
pandemic impacts like Covid-19. This paper offers the Covid19 impact on Banking
ontology(Covid19IBO)thatprovides semantic information about the impact of the Covid-19
on the banking sector of India. The major contributions of the paper are listed below:

•Development of Covid19 Impact on Banking ontology (Covid19-IBO)

•Evaluation of the Covid19-IBO by different evaluation approaches The rest of the paper is
divided into six sections.Section 2 describes existing work. Section 3 developed
Ontology.

Section 4 shows the development and evaluation of the Covid19-IBO. Section 5 emphases
the result and discussion of the proposed work. Section 6 shows the results of subjective
testing and last section concludes the paper.
IMPACT OF COVID OUTBREAK ON RBI AND MEASURES TO
FIGHT

Since March 2020, the Reserve Bank of India (RBI) has taken numerous measures to fight
the COVID-19 at the financial front. These measures also form part of the Special Economic
Package and the ‘Atmanirbhar Bharat Abhiyaan’ recently announced by the Hon’ble Prime
Minister of India, Narendra Modi.

Various developmental and regulatory policies undertaken by the RBI to address financial
stress caused by COVID-19 include:
 Liquidity Management
 Regulation and Supervision
 Decisions in respect of Financial Markets

LIQUIDITY MANAGEMENT
Targeted Long-Term Repo Operations (TLTROs): RBI will conduct auctions of targeted
term repos of about INR 1 lakh cr for fresh deployment in investment-grade corporate bonds,
commercial paper, non-convertible debentures.
Cash Reserve Ratio: As a one-time measure, RBI has reduced the cash reserve ratio of all
banks by 100 basis points to 3% of Net Demand and Time Liabilities (NDTL) which will
result in liquidity enhancement of about INR 1.37 lakh cr.
Marginal Standing Facility: The limit of the banks for borrowing overnight has been
increased from 2% to 3% into the Statutory Liquidity Ratio (SLR). This will allow additional
liquidity of INR 1.37 lakh cr.

REGULATION AND SUPERVISION

Moratorium on Term Loans: RBI has permitted all lending institutions to allow a moratorium
of three months (later extended to six months) on payment of instalments in respect of all
term loans outstanding as on March 1, 2020. These institutions include:
Commercial banks like regional rural banks, small finance banks and local area banks
Co-operative banks and all-India Financial Institutions, NBFCs like housing finance
companies and micro-finance institutions.

Deferment of Interest on Working Capital Facilities: RBI also permitted all lending
institutions to allow a deferment of three months on payment of interest in respect of working
capital facilities sanctioned in the form of cash credit/overdraft of all such facilities
outstanding as on March 1, 2020.

Easing of Working Capital Financing: All lending institutions are permitted by RBI to
recalculate drawing power by reducing margins and/ or by reassessing the working capital
cycle for the borrowers in respect of working capital facilities sanctioned in the form of cash
credit/overdraft.

Support to Real Estate Sector: RBI has permitted an additional time of one year for the
extension of the date for commencement of commercial operations (DCCO) in respect of all
loans provided by NBFCs to the real estate sector.

DECISIONS IN RESPECT OF FINANCIAL MARKETS

In recent times, RBI has recognized the growth of the offshore Indian Rupee (INR) derivative
market - the Non-Deliverable Forward (NDF) market and decided to remove segmentation
between the onshore and offshore markets.
RBI has now permitted banks in India to participate in the NDF market from 1st June 2020
through their branches in India, their foreign branches or through their International Financial
Services Centre (IFSC) Banking Units (IBUs).

Indian Banking system continuously framing reforms to minimize the effect of COVID-
19.As total world suffering from COVID-19 Pandemic.It will change the way the
world works.It creates great depression. The Corona virus disease first time identified
in Wuhan , the capital of Hubai China in December 2019 and spread to the overall
world.After observing its infection and increase the rate of death World Health Organization
declare as Pandemic on 11th March 2020.

As seen current situation India is Widely affected from Corona virus. According to WHO
currently confirmed cases of COVID-19 have been 7,273,958 reported in the World including
4, 13,372 deaths. In India 1, 37, 448 active cases of COVID-19, out of that 8,102 deaths
declared as a government of India.Total world go into recession from COVID-s all the
sector .Continuously rise in unemployment, High stress incurred on supply chain
management. Completely decreased the Government revenue. Suddenly downfall in
Hospital and tourism industry. Reduced in consumer buying activity. Drastically reduced in
fuel consumption activity.

Big companies in India like TATA Motors, BHEL, Aditya Birla, Larsen and
Turbo reduced their Industrial operation. Indian Banking sector get affected from
Corona Pandemic. Banks get outbreak due to novel Corona Virus. Borrowers and Industries
face the dangerous problem like job losses, slowdown in sales and decreased in the profit as
virus spread in overall India.

Banking customer wanted some financial relief and Reserve Bank of India encouraging
national banks to provide the relief by framing good banking policies towards customer. For
security issues amongst employees it was decided to give facility for employees to work
from remote areas.

INDIAN BANKING AFTER COVID-19 INFLUENCE

Rating agency Moody’s revised the Indian banking system to negative from stable, citing
disruptions in economic activity caused by the COVID-19 outbreak and an ensuing decline in
asset quality. It said asset quality will deteriorate across corporate, small, and medium
enterprises and retail segments, leading to pressure on profitability and capital for lenders
According to Moody’s, the stress among non-bank financiers will limit their capacity to lend,
further hindering India’s economic growth which was on a decline prior to the covid-19
outbreak.

According to Moody’s, a sharp decline in economic activity and a rise in unemployment will
lead to a deterioration of household and corporate finances, which in turn will result in
increases in delinquencies . The rating agency said the rise in provisions and fall in revenues
will hurt banks ’profitability, leading to a deterioration of capitalisation. If the government
makes more capital infusions into public sector banks (PSBs), as it has in the past few years,
it will mitigate capital pressure for them.

The COVID-19 is an unfolding event bringing uncertainty to every aspect of the society.
Safety of the people is the utmost priority along with the continuity of business and providing
consistent and transparent financial reporting to stakeholders. The Government of India and
RBI has introduced various economic and fiscal stimulus measures to tide over the COVID-
19 crisis. To navigate through these unprecedented times the BFSI needs to focus on
liquidity, credit risk, wellbeing of its employees along with the quality of financial reporting
and disclosures.

The COVID-19 would impact the financial statements of the entities in the financial services
in the areas of business model assessment, post balance sheet events and certain other key
areas. The Reserve Bank of India has taken certain measures to give some relief to the
lending institutions in the areas of liquidity, regulation and supervision, and financial
markets. In light of these measures, banks need to consider financial and reporting
considerations around going concern, liquidity and credit risk assessment, etc.

There may be large-scale business disruptions that can potentially give rise to liquidity issues
for certain entities. This might also have consequential impacts on the credit quality along the
supply chain. Insurers are getting impacted in terms of their assets and liability reflected in
the balance sheet. This, as a result, threatens their business continuity as well as future
growth. The pandemic is an acid test for financial institutions and more so insurers as a stress
that they have tested and scrutinized in their financial risk analysis, operational risk analysis,
and business continuity planning.
CONCLUSION AND FUTURE WORK

The positive economic growth of any country reflects the financial soundness and increased
purchasing power of that country. The Covid-19 pandemic destroyed the growth of the
various economic activities in countries so India as well.

Banking sector plays vital role in supporting the economy of the country by maintaining
liquidity. In order to know the impact of Covid-19 on the Indian banking sector, we have
presented Covid19-IBO ontology by analyzing existing data that available in different format.

The developed Covid19-IBO ontology has been evaluated by three approaches namely
competency questions, OntoMetric tool and OOPs pitfall scanner that shows completeness
of the Covid19-IBO. We have also compared the Covid19-IBO with other accessible and
available ontologies of Covid19 and infer that the existing ontologies are not able to provide
complete and concrete answer of the question about the Indian banking sector.

The future work of this paper is focus on the development of the widget that offer
semantic services like visualization, annotation, mapping etc. We will also publish the
Covid19-IBO on linked open data (LOD) for better accessibility and reusability.

References
https://www.researchgate.net/publication/
351023042_Impact_of_Covid19_Outbreak_on_Performance_of_Indian_Banking_Sector

https://eprajournals.com

CYBER CRIMES IN BANKING SECTOR

ABSTRACT

Online banking or e-banking refers to the banking facility through information and
communication technology. Traditionally, banking required a customer to stand in a long
queue even to withdraw his money or to perform other ancillary functions. Now banking
facility is available 24×7 through ATMs (Automated Teller Machines), internet banking,
transfer through NEFT and RTGS etc., which has narrowed down the gap between the bank
and the customer.
E-banking is not only limited to banking facility through computer related systems. In the
modern era, with the increase of users of smartphones e-banking covers mobile banking also.
Because of liberalization, privatization and globalization, it became necessary for the banks
to start with e-banking facility.

The project will provide an introduction to the concept of e-banking and its advantages in
India. Further the author will provide statistics of the increase in use of e-banking services in
India. The paper shall also highlight the role of Reserve Bank of India in strengthening
internet banking. The paper shall then delve into the drawbacks of e-banking by explaining
various cyber-crimes related to banking, focusing on Information Technology Act, 2000 with
the help of statistics on cyber-crime reported in the past few years.

Lastly, the author shall highlight the role of Cyber Appellate Authority in combating cyber-
crime in banking sector. The liability of both the bank and the customer depending upon the
facts and circumstances of the case shall also be discussed. Finally the author shall suggest
the safeguards a customer and a bank should undertake while dealing electronically.

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 transactions 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
(Narasimham Committee) 1991-1998, information and technology in banking sector was
used. On one hand, technology has created advantage 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 and market risks. Given the increasing reliance of
customers 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 sector has witnessed expansion of its services 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-crimes result in huge monetary losses which are incurred not only by the
customer but by the banks also which affects economy of a nation. Non-monetary cyber-
crime occurs when viruses are created and distributed on other computers or confidential
business information is posted on Internet. The most common of it is phishing and pharming.

CONCEPT OF E-BANKING

Electronic Banking or e-banking refers to a system where banking activities are carried out
using informational and computer technology over human resource. In comparison to
traditional banking services, in e-banking there is no physical interaction between the bank
and the customers. E-banking is the delivery of bank‟s information and services by banks to
customers via different delivery platforms that can be used with different terminal devices
such as personal computer and a mobile phone with browser or desktop software, telephone
or digital television.
The first initiative in the area of bank computerization was stemmed out of two successive
Committees on Computerization (Rangarajan Committee). The first committee was set up in
1984 which drew the blueprint for the mechanization and computerization in banking
industry.

The second Committee was set up in 1989 which paved the way for integrated use of
telecommunications and computers for applying fully the technological breakthroughs to the
banking operations. The focus shifted from the use of Advanced Ledger Posting Machines
(ALPMs) for limited computerization to full computerization at branches and to integration
of the branches. Till 1989, banks in India had 4776 ALPMs at the branch level, over 2000
programmers/ systems personnel and over 12000 Data Entry Terminal Operators. E-banking
is also known as Cyber Banking, Home Banking and Virtual Banking. E-banking includes
Internet Banking, Mobile Banking, RTGS, ATMs, Credit Cards, Debit Cards, and Smart
Cards etc.
If we look at the rise of E-banking it is clear that people have started using this facility more
in comparison to the traditional form of banking as evident from the table below for
transaction in AprilNovember, 2016 (in millions).

CYBER CRIME: TYPES AND ITS IMPACT ON BANKING SECTOR

Neither crime nor cyber-crime has been defined in IPC or Information Technology Act, 2000
(hereinafter referred as IT Act), but only provides punishment for certain offences. The word
„cyber‟ is synonymous with computer, computer systems and computer network. Thus, it can
be said that cybercrime occurs when any illegal activity is committed using a computer or
computer resource or computer network.

Douglas and Loader have defined cybercrime as a computer mediated activity which is
conducted through global electronic networks that are either considered illicit or illegal by
certain parties.25 Cyber crimes have been classified into four categories by Wall. They are
cyber-deceptions, cyber-violence, cyber-pornography and cybertrespass.26 The frauds in e-
banking sector are covered under cyber-deception.
Cyber-deception is further defined as an immoral activity which includes theft, credit card
fraud, and intellectual property violations. Mostly frauds are committed because of two goals,
one, to gain access to the user‟s account and steal his/her personal information and transfer
funds from one account to another. Second is to undermine the image of the bank and block
the bank server so that the customer is unable to access his/her account. In terms of number
of cybercrime incidents in ransom ware, an identity theft and phishing attack, India has been
ranked among the top 5 countries.

According to Global Economic Crime Survey 2014, conducted by PwC, cybercrime was one
of the top economic crimes which were reported by various organizations across the world,
including India. National Crime Records Bureau (NCRB) reported that a total of 5,752
persons were arrested for committing cyber crimes during 2014 as compared to 3,301 persons

arrested in 2013 registering 74.3% increase over the previous year. Uttar Pradesh (1,223) was
reported with the maximum number of persons arrested under such crimes. Banking sector
too has suffered an impact of cyber crimes. RBI has defined bank fraud has as, 'A deliberate
act of omission or commission by any person, carried out in the course of a banking
transaction or in the books of accounts maintained manually or under computer system in
banks, resulting into wrongful gain to any person for a temporary period or otherwise, with or
without any monetary loss to the bank.

CYBER CRIMES RELATED WITH BANKING SECTOR HACKING

Hacking is a crime, which means an unauthorized access made by a person to cracking the
systems or an attempt to bypass the security mechanisms, by hacking the banking sites or
accounts of the customers.

The Hacking is not defined in the amended IT Act, 200032. But under Section 43(a) read
with section 66 of Information Technology (Amendment) Act, 2008 and under Section 379 &
406 of Indian Penal Code, 1860, a hacker can be punished. Before the 2008 Amendment Act,
Hacking was punishable under Section 66 of the IT Act with upto three years of
imprisonment or fine which may extend upto two lakh rupees, or both. If such crime is
proved then for such hacking offence, the accused is punished under IT Act, for
imprisonment, which may extend to three years or with fine, which may be extended to five
lakh rupees or both.

Hacking offence is considered as a cognizable offence, it is also a bailable offence. Credit

Card Fraud Online credit card frauds take place when customers use their credit card or debit
card for any online payment and another person, with malafide intentions, use such card
details and password by hacking and misusing it for online purchases using the customers
hacked card details or action of a fraud made by an devil34. The hacker can misuse the credit
card by impersonating the credit card owner when electronic transactions are not secured.
Cases related to online frauds have come down by about 17.5 per cent in FY'22 to ₹128 crore
as against ₹160 crore recorded in the previous fiscal, the Rajya Sabha was informed on
Monday. Comprehensive steps have been taken to tackle online banking frauds. 

“As per RBI data on frauds reported by Scheduled Commercial Banks (SCBs) under the
category “Card/Internet- ATM/Debit Cards, Credit Cards and Internet Banking", the amount
involved in such frauds, based on the year of occurrence, has declined from Rs. 185 crore in
the financial year 2019-20 to Rs. 160 crore in the financial year 2020-21 {year-on-year (Y-o-
Y) decline of 15.2%} and to Rs. 128 crore in the financial year 2021-22 (Y-o-Y decline of
17.5%),"Minister of State for Finance said in the Lok Sabha.

He further said that as per information received from the National Crime Records Bureau
(NCRB) regarding cases registered in respect of such frauds, the latest published data pertains
to the year 2020, according to which, in respect of frauds related to ATMs/ credit cards /
debit cards, online banking and OTP for the year 2018 to 2020, 16450 cases were registered
and 8981 cases were disposed of.
He was replying to Opposition's question on whether the RBI has proposed to make cardless
cash withdrawal facility available across all banks and ATM networks using the Unified
Payment Interface (UPI), in addition to enhancing ease of transactions, to help prevent frauds
such as card skimming, card cloning, etc.

"RBI has issued instructions on Cyber Security Framework in Banks and have mandated
SCBs to report all unusual cyber incidents to RBI within two to six hours of occurrence of
such incidents. These incidents are analysed for the pattern of attack and the vulnerabilities
exploited, and where needed, advisories/alerts are issued to the banks so as to avoid repeat
attacks/exploitation of the same vulnerabilities,: the Minister informed the House.

THE CORRECTIVE STEPS TAKEN BY THE GOVERNMENT TO

PREVENT FRAUD AND CHEATING THROUGH ONLINE
TRANSACTIONS

1) A comprehensive circular on Cyber Security Framework in Banks was issued by RBI

on 2.6.2016, wherein banks were advised to put in place a board-approved cyber-
security policy elucidating the strategy containing an appropriate approach to combat
cyber threats given the level of complexity of business and acceptable levels of risk.

2) Guidelines on Cyber Security Controls for third party ATM Switch Application
Service Providers (ASPs) have been issued by RBI on 31.12.2019.
 3) Master Directions on Digital Payment Security Controls have been issued by RBI on
18.2.2021, wherein banks have been advised to put in place necessary controls to
protect the confidentiality and integrity of customer data, and processes associated
with the digital product/services offered.

4) A National Cyber Crime Reporting Portal has been launched by the Ministry of Home
Affairs to enable public to report incidents pertaining to all types of cybercrimes, and
a toll-free number has also been operationalised to get assistance in lodging online
complaints.

5) For immediate reporting of financial frauds and to stop siphoning-off of funds by the
fraudsters, Financial Cyber Fraud Reporting and Management System module has
been made operational by the Indian Cyber Crime Coordination Centre (I4C),
working under the Ministry of Home Affairs.

6) The Indian Computer Emergency Response Team (CERT-IN) under the Ministry of
Electronics and Information Technology issues alerts and advisories regarding latest
cyber threats and countermeasures on regular basis to ensure safe usage of digital
technologies, and is working in coordination with service providers, regulators and
LEAs to track and disable phishing websites and facilitate investigation of fraudulent
activities.

A number of steps have been taken to enhance security of digital payment

transactions

  conversion of magnetic strip card to EMV chip and PIN cards;

 mandating enablement of online alerts for all transactions;

 certification of merchant terminals;

 mandating PIN entry for all ATM transactions

 enabling all ATMs for processing EMV chip and PIN cards;

 restricting international usage by default and enablement of the same only after specific
mandate from the customer;
 Capping the value/mode of transactions/beneficiaries;

 setting daily limits; and

  issuing alerts upon addition of beneficiaries.

MORE CYBER CRIMES

Keystroke Logging or Keylogging :

Key logging is a method by which fraudsters record actual keystrokes and mouse clicks. Key
loggers are “Trojan” software programs that target computer’s operating system and are
“installed” via a virus. These can be particularly dangerous because the fraudster captures
user ID and password, account number, and anything else that has been typed.

number, and anything else that has been typed. Viruses A virus is a program that infects an
executable file and after infecting it causes the file to function in an unusual way. It
propagates itself by attaching itself to executable files like application programs and
operating system. Running the executable file may make new copies of the virus. On the
other hand, there are programs that can copy themselves, called worms which do not alter or
delete any file, but only multiply itself and send the copy to other computers from the
victim‟s computer.

Spyware

Spyware is the number one way that online banking credentials are stolen and used for
fraudulent activities. Spyware works by capturing information either on the computer, or
while it is transmitted between the computer and websites. Often times, it is installed through
fake “pop up” ads asking to download software. Industry standard Antivirus products detect
and remove software of this type, usually by blocking the download and installation before it
can infect the computer.
Watering hole

“Watering hole” cyber fraud is considered to be a branch arising from phishing attacks. In
watering hole, a malicious code is injected onto public web pages of a website which is
visited only by a small group of people. In a watering hole attack situation, when the victim
visit the site injected with malicious code by attackers, the information of such victim is then
traced by the attacker. In phishing attack, victim himself gives away information innocently
whereas in watering hole the attacker waits for the victim to visit the site.

There can be an increase in watering hole incidents when there is more misuse and
exploitation of zero-day vulnerabilities in various software programs like Adobe Flash Player
or Google Chrome. Cyber criminals in watering hole use the kits available in black market to
infect, inject and configure a website which may be new or updated to lure people to provide
them details. The site which is to be used for an attack is usually hacked by the attackers‟
months before the actual attack.
They use professional methods to perform such act. Therefore it becomes difficult for cyber-
crime cells to locate such infected website. Watering hole is thus a method of surgical attack
where the hackers aim to hit only certain specific group of people in the internet and in
comparison to phishing, it is less earsplitting. Credit Card Redirection and Pharming
Pharming is linked with the words, „farming‟ & „phishing‟. In Pharming a bank‟s URL is
hijacked by the attackers in such a manner that when a customer log in to the bank website
they are redirected to another website which is fake but looks like an original website of the
bank. Pharming is done over Internet and Skimming is another method which occurs in
ATMs.

DNS Cache Poisoning :

DNS servers are deployed in an organization’s network to improve resolution response

performance by caching previously obtained query results. Poisoning attacks against a DNS
server are made by exploiting vulnerability in DNS software. That causes the server to
incorrectly validate DNS responses that ensure that they’re from an authoritative source. The
server will end up caching incorrect entries locally, and serve them to other users that make
the same request.
Victims of a banking website could be redirected to a server managed by criminals who could
use it to serve malware, or to induce bank customers to provide their credentials to a copy of
a legitimate website. If an attacker spoofs an IP address; DNS entries for a bank website on a
given DNS server, replacing them with the IP address of a server they control, makes an
attacker able to hijack customers.

Malware based-attacks
:Malware based-attacks are one of the most among hazardous cyber threats related to
electronic banking services. In such attacks, a malicious code is designed. Now-a-days, the
number of malware attacks in banking sector has been increasing.
Some of the infamous banking malware are Carbep, Tinba, Spyeye, Zeus and KINS. Zeus is
the oldest out of these malware. It was detected in July 2007 when the information was lost
and stolen from United States Department of Transportation. There are other malwares which
have been identified in previous years to commit bank fraud on a large scale.42 It has been
noticed that almost every virus has two features, one, that they secure a backdoor entry into
the system and they steal credential information of a user.

RECOMMENDATIONS TO PREVENT CYBER CRIME

Banking sector is the backbone of our economy. The increasing number of cyber-crime cases
has resulted in huge loses to our economy. Cyber-attacks should be prevented by ensuring
suitable legislation which is implemented effectively. Both the banks and the customer
should be made aware about the risk involved and safeguard measures. There needs to be
cooperation between the various stakeholders to counter cyber-crime.
The Indian Government established an Inter Departmental Information Security Task Force
(ISTF) with the National Security Council as the nodal agency for the coordination of all
matters relating to effective implementation of its cyber security strategy. Indian Computer
Emergency Response Team (CERT-In) is the national nodal agency which is made to
respond to computer security incidents whenever they occur.

Few of the activities undertaken by CERT-In in implementing cyber security include

coordination of responses to security incidents and other major events; issuance of advisories
and time bound advice regarding imminent threats; product vulnerabilities analysis;
conducting trainings on specialized topics of cyber security; and evolution of security
guidelines on major technology platforms.

One of the main issues related with cybercrime is of jurisdiction. Cyber-crime can be
committed in any part of the globe having its impact in any corner. Every citizen should be
able to identify and report cybercrimes from anywhere regardless of the country they reside
in. The existing systems present in India for reporting cyber related offences involves
registering complaints with the local police stations or cybercrime cells. Many Indian states
have setup cybercrime cells, which monitor such crimes.

In several instances, where the victims of cybercrime may not be able to report a cybercrime
due to several reasons, such as staying in a remote location, unawareness regarding the place
to report and privacy related issues. This tends to result in many cybercrime cases going
unreported since there is no centralized online cybercrime reporting mechanism. Also, for
law enforcement agencies at various levels such as national, state, and local level, there is no
centralized referral mechanism for complaints relating to cybercrime.44 IT Act should be
amended accordingly to define cybercrime and also specify the cases where the Act will have
extra-territorial jurisdiction. The scope of the IT Act needs to be broadened to include legal
framework relating to cyber laws in India. The responsibility of the intermediaries is vague
and must be made more clear and explicit.

CONCLUSION :
The present conceptual framework has provided a bird‟s eye view of ongoing efforts to
prevent and control highly technological and computer based crimes, and highlighting
general trends and developments within and without the Indian banking sector. This study has
described deeply a number of common electronic crimes, identified in the specific areas of
Indian banking sector.

The study has provided an overview to the concept of E-banking by discussing deeply
various cyber-crimes, identified specifically in the banking sector. The Banking system is the
lifeblood and backbone of the economy. Information Technology has become the backbone
of the banking system. It provides a tremendous support to the ever increasing challenges and
banking requirements.

Presently, banks cannot think of introducing financial product without the presence of
Information Technology. However Information Technology has had an adverse impact too on
our banking sector where crimes like, phishing, hacking, forgery, cheating etc. are
committed. There is a necessity to prevent cybercrime by ensuring authentication,
identification and verification techniques when a person enters into any kind of banking
transaction in electronic medium.

The growth in cyber-crime and complexity of its investigation procedure requires appropriate
measures to be adopted. It is imperative to increase the cooperation between the stakeholders
to tackle cyber-crime. According to National Crime Records Bureau, it was found that there
has been a huge increase in the number of cyber-crimes in India in past three years.
Electronic crime is a serious problem. In cases of cyber-crime, there is not only financial loss
to the banks but the faith of the customer upon banks is also undermined. Indian banking
sector cannot avoid banking activities carried out through electronic medium as the study
suggest that there has been an increase in the number of payments in e-banking. However, the
change in the banking industry must be such the suits the Indian market. Banks are required
to be updated and ahead with the latest developments in the IT Act, 2000 and the rules,
regulations, notifications and orders issued therein pertaining to bank transactions and
emerging legal standards on digital signature, electronic signature, data protection, cheque
truncation, electronic fund transfer etc. as part of overall operational risk management
process.

It is the need of the hour to increase cooperation between the countries, over the tools and
techniques, which will help them effectively to counter global electronic crime. In developing
countries, like India, cyber and electronic crime poses a serious problem because there is a
lack of training on the subjects related to investigation of electronic and cybercrimes.

Lastly, it can be concluded that to eliminate and eradicate cybercrime from the cyber space is
not a seemingly possible task but it is possible to have a regular check on banking activities
and transactions. The only propitious step is to create awareness among people about their
rights and duties and to further making the implementation of the laws more firm and
stringent to check crime.

REFERENCES
https://www.aiirjournal.com/uploads/Articles/2019/05/3799_08.Ms.Neeta%20&%20Dr.
%20V.K.Bakshi.pdf

1. 1.The Narsimham Committee was first set up in 1991 under the chairmanship of Mr.
M. Narasimham the then 13th governor of RBI. Since all of its recommendations
were not implemented second committee in 1998 was set up.

2. 2.RBI Guidelines on Information Security, Electronic Banking, Technology Risk

management and Cyber Frauds, 2012.

3. Soni RR and Soni Neena, An Investigative Study of Banking Cyber Frauds with
Special Reference to Private and Public Sector Banks, Vol. 2(7), 22-27, July (2013),
Research Journal of Management Sciences, Available online at: www.isca.in 4. Dr. B
R Sharma and Dr. R P Nainta, Banking Law & Negotiable Instruments Act, 4th Edn,
Allahabad Law Agency, p 183.
 A COMPARITIVE STUDY OF COOPERATIVE BANKS AND
NATIONALISED BANKS ON VARIOUS SERVICE
PARAMETRES

ABSTRACT

With the advent of Cooperative movement in India, there has been a sharp rise in No. of
cooperative banks in India. Although small in their size & CASA deposits, cooperative
bankshave played an important role in spreading banking services to cities & towns across
India. The present study is an attempt to compare cooperative banks with nationalized banks
on five parameters, viz ease of deposit, ease of withdrawal, customer relations, reliability of
bank, and ease of location. A sample size of 100 customers is chosen as respondents.
Respondents included those who have accounts both in a nationalized bank and a cooperative
bank. It has been found that cooperative banks fared better in ease of deposit & customer
relations. On the other hand nationalized banks fared better in ease of withdrawal &
reliability. While on location advantage,no significant difference has been found.

INTRODUCTION
According to the International Co-operative Alliance Statement of co-operative identity, a co-
operative is an autonomous association of persons united voluntarily to meet their common
economic, social, and cultural needs and aspirations through a jointly-owned and
democratically-controlled enterprise. Co-operatives are based on the values of self-help, self-
responsibility, democracy, equality, equity and solidarity. In the tradition of their founders,
co-operative members believe in the ethical values of honesty, openness, social responsibility
and caring for others. Co-operative banks share common features:

 Customer’s owned entities :

In a co-operative bank, the needs of the customers meet the needs of the owners, as
co-operative bank members are both. As a consequence, the first aim of a co-
operative bank is not to maximize profit but to provide the best possible products and
services toits members.
  Democratic member control :
Co-operative banks are owned and controlled by their members,who democratically
elect the board of directors. Members usually have equal voting rights,according to
the co-operative principle of”one person, one vote”.

 Profit allocation :
In a co-operative bank, a significant part of the yearly profit, benefits or surplusis
usually allocated to constitute reserves. A part of this profit can also be distributed to
the co-operative members, with legal or statutory limitations in most cases.

The economic prosperity of a country is greatly influenced by various factors like the
operational efficiency, productivity and financial performance of industrial sector, efficiency
and varieties of services in service sector. The real strength of economy lies on service sector
and banking sector in particular.

The banking and finance sector has witnessed a major setback across the globe in recent days
in terms of their financial performance. India, a fast growing economy is not an exception to
the agony of recession.

However, the effective and timely prescriptions like Financial Stimulus Packages taken by
Reserve Bank of India and Ministry of Finance saved the Indian Economy and Banking
sector from the meltdown shock and repercussion.

Due to these measures taken by RBI the Indian Banking Companies have considerably
performed well in the present meltdown scenario. It is also evidenced that almost all the
banking companies in India have positive figures in the fourth quarter of financial year 2008-
09.

In this context an attempt was made to study the performance of nationalized and private
sector banks through the opinion survey of customers of various banks to measure the impact
and valence of economic meltdown in Kanchipuram Town. A structured Interview Schedule
was administered among Account holders of the various banks during January to July 2009.
Since the population size is large, convenience sampling was adopted.
NATIONALIZED BANKS

Organised banking in India is more than two centuries old. Till 1935 all the banks were in
private sector and were set up by individuals and/or industrial houses which collected
deposits from individuals and used them for their own purposes. In the absence of any
regulatory framework, these private owners of banks were at liberty to use the funds in any
manner, they deemed appropriate and resultantly, the bank failures were frequent.

Move towards State ownership of banks started with the nationalisation of RBI and passing
of Banking Companies Act 1949. On the recommendations of All India Rural Credit Survey
Committee, SBI Act was enacted in 1955 and Imperial Bank of India was transferred to SBI.
Similarly, the conversion of 8 State-owned banks (State Bank of Bikaner and State Bank of
Jaipur were two separate banks earlier and merged) into subsidiaries (now associates) of SBI
during 1959 took place. During 1968 the scheme of ‘social control’ was introduced, which
was closely followed by nationalisation of 14 major banks in 1969 and another six in 1980.

Keeping in view the objectives of nationalisation, PSBs undertook expansion of reach and
services. Resultantly the number of branches increased 7 fold (from 8321 to more than 60000
out of which 58% in rural areas) and no. of people served per branch office came down from
65000 in 1969 to 10000. Much of this expansion has taken place in rural and semi-urban
areas. The expansion is significant in terms of geographical distribution. States neglected by
private banks before 1969 have a vast network of public sector banks.

The PSBs including RRBs, account for 93% of bank offices and 87% of banking system
deposits. In the early 1990s, the then Narsimha Rao government embarked on a policy of
liberalization, licensing a small number of private banks. These came to be known as New
Generation tech-savvy banks, and included Global Trust Bank (the first of such new
generation banks to be set up), which later amalgamated with Oriental Bank of Commerce,
Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank.

This move, along with the rapid growth in the economy of India, revitalized the banking
sector in India, which has seen rapid growth with strong contribution from all the three
sectors of banks, namely, government banks, private banks and foreign banks.

BENEFITS OF COOPERATIVE BANKS

Co-operative banks are deeply rooted inside local areas and communities. They are involved
in localdevelopment and contribute to the sustainable development of their communities, as
their members and management board usually belong to the communities in which they
exercise their activities. By increasing banking access in areas or markets where other banks
are less present - SMEs, farmers in rural areas,middle or low income households in urban
areas - co-operative banks reduce banking exclusion and foster the economic ability of
millions of people. They play an influential role on the economic growth inthe countries in
which they work in and increase the efficiency of the international financial system. Their
specific form of enterprise, relying on the above-mentioned principles of organization, has
proven successful both in developed and developing countries. (Source: ICBA, International
cooperative bank association)

COOPERATIVE BANKS IN ASIA

In Asia-Pacific, 22 cooperative banking groups or networks have been listed, 13 of which are
members of the International Cooperative Banking Association. Efforts are being made for
exampling membership from following countries: Bangladesh, Nepal, Singapore, Japan,
Republic of Korea, Australia and New Zealand.

FOREIGN BANKS IN INDIA

Foreign Banks in India: India is one of the fastest-growing economies in the world. As of
now, there are 46 Foreign Banks in India in 2022. The list includes City Bank, Bank of
America, Barclays Bank, DBS Bank, Standard Chartered Bank, Deutsche Bank, and others.
There are a total of 45 International Banks in India which have around 300 branches mostly
located in major cities of Indian states. In this article, we are going to discuss the Top Foreign
Banks in India and other important details related to foreign banks.

What is Foreign Bank?

A Foreign Bank is a financial institution that provides financial services to international

consumers from outside of its native country. A Foreign Bank branch is a sort of international
bank that must comply with the laws of both its home and host countries. According to the
Reserve Bank of India (RBI), there are now 46 foreign banks in India as of 2022.

Top Foreign Banks in India

Here, we are providing the list of all top foreign banks in India along with complete
information about these banks.

 Standard Chartered Bank

 Standard Chartered Bank is a British multinational banking and financial services
firm headquartered in London, England. According to the Reserve Bank of India,
Standard Chartered Bank is one of the largest foreign banks located in India.

 Bank of America
Bank of America is one of the top foreign banks in India, the bank support
international transaction between India and America. Its headquarter is located in the
USA.

 Citi Bank City Bank is a subsidiary of Citigroup, a new-york based international

financial services corporation. City Bank is a foreign bank with a presence in India
that offers a broad range of services. Its Indian headquarter are in Mumbai,
Maharashtra.

 DBS Bank
The headquarter of DBS Bank is located in Singapore. It is a Singaporean
multinational banking and financial services organization. With its global strength, the
bank has managed to get a spot among the world’s 15 safest banks in the world.

 HSBC India
HSBC was founded in London in 1991 by the Hong Kong and Shanghai Banking
Corporation; it is Europe’s second-largest bank. It has over 50 branches in India and
serves a customer base of over 1 lakh people. Its Indian headquarter is located in
Mumbai.

 Deutsche Bank
Deutsche bank is a leading German bank with strong European roots and a global
network. This is newly created in 2019, a leading foreign bank, focused investment
bank, and asset management.
Do Foreign Banks in India Issue Credit Cards?
Yes, the Foreign Banks in India which have followed the regulations of RBI can spread their
banking features to Indian customers, and they do offer Credit Card, Debit Card and other
banking services as per their business strategy.

URBAN COOPERATIVE BANKS

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary
cooperative banks located in urban and semi-urban areas. These banks, till 1996, were
allowed to lend money only for non-agricultural purposes. This distinction does not hold
today. These banks were traditionally centered on communities, localities work place groups.
They essentially lent to small borrowers and businesses. Today, their scope of operations has
widened considerably.

HISTORY OF URBAN COOPERATIVE BANKS

The enactment of Cooperative Credit Societies Act, 1904, however, gave the real impetus to
the movement. The first urban cooperative credit society was registered in Canjeevaram
(Kanjivaram) in the erstwhile Madras province in October, 1904. Amongst the prominent
credit societies were thePioneer Urban in Bombay (November 11, 1905), the No.1 Military
Accounts Mutual Help Co-operativeCredit Society in Poona (January 9, 1906).

Cosmos in Poona (January 18, 1906), Gokak Urban(February 15, 1906) and Belgaum Pioneer
(February 23, 1906) in the Belgaum district, the Kanakavli-Math Co-operative Credit Society
and the Varavade Weavers’ Urban Credit Society (March 13,1906) in the South Ratnagiri
(now Sindhudurg) district. The most prominent amongst the early creditsocieties was the
Bombay Urban Co-operative Credit Society, sponsored by Vithaldas Thackerseyand
Lallubhai Samaldas established on January 23, 1906.

The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad
basing it toenable organization of non-credit societies. The Maclagan Committee of 1915 was
appointed to reviewtheir performance and suggest measures for strengthening them. The
committee observed that suchinstitutions were eminently suited to cater to the needs of the
lower and middle income strata of societyand would inculcate the principles of banking
amongst the middle classes.

The committee also felt thatthe urban cooperative credit movement was more viable than
agricultural credit societies. The recommendations of the Committee went a long way in
establishing the urban cooperative credit movement in its own right.
Over the years, primary (urban) cooperative banks have registered a significant growth in
number, size and volume of business handled. As on 31st March, 2003 there were 2,104
UCBs of which 56 were scheduled banks. About 79 percent of these are located in five states,
- Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems
faced by a few large UCBs have highlighted some of the difficulties these banks face and
policy endeavors are geared to consolidating and strengthening this sector and improving
governance.

CONCLUSION
References
 https://www.bankersadda.com/foreign-banks-in-india/
 https://www.researchgate.net/publication/
333995126_A_Comparative_Study_on_Nationalized_and_Private_Sector_Banks_in_
Kanchipuram_in_the_Context_of_Economic_Meltdown
 https://www.academia.edu/9389420/
A_COMPARITIVE_STUDY_OF_COOPERATIVE_BANKS_AND_NATIONALIS
ED_BANKS_ON_VARIOUS_SERVICE_PARAMETRES_INTRODUCTION
 Rbi.org.in