RBI Draft Rules: Suspicious Transactions of ₹1,000 or More May Face Temporary Restrictions; Customers to Get 20 Days to Respond
New Delhi, Special Correspondent: The Reserve Bank of India (RBI) has proposed tighter monitoring of bank accounts to curb the flow of money linked to cyber fraud. Under the proposed framework, banks will prepare financial profiles of customers and monitor transactions that deviate significantly from their declared financial activity or normal account patterns.
Banks may temporarily restrict transactions involving suspicious money mule activity or funds suspected to be linked to cyber fraud. Transactions of ₹1,000 or more, when flagged by the bank’s monitoring system as suspicious, may also come under scrutiny. Artificial intelligence and machine learning tools may be used to identify unusual activity.
Customers to Get an Opportunity to Explain
Under the proposed rules, banks will have to inform account holders of the reason for the restriction, the process for lifting it and the contact details of the concerned officer. Customers will be given 20 days to submit an explanation.
After receiving the response, the bank must complete its review and take a decision within 30 days. If the suspicion is not substantiated, the restriction must be removed.
If concerns remain, the matter may be referred to the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) under the National Cyber Crime Reporting Portal.
Temporary Restriction to Last a Maximum of 60 Days
If no statutory direction is received from the investigating agency or competent authority within the prescribed period, the bank must remove the restriction on the 31st day after the referral period ends. The total period of temporary restriction may extend up to 60 days, subject to the proposed framework.
The new system is proposed to become mandatory from April 1, 2027, although banks may adopt it earlier. Banks will also be required to appoint nodal officers for handling complaints and maintain records of such cases for prescribed periods.
The proposed measures are aimed at strengthening the banking system’s response to cyber fraud while reducing the risk of legitimate customers being wrongly flagged.
0 Comments