RBI tightens checks on banks amid rising cyberattack threats
What's the story
The Reserve Bank of India (RBI) is tightening its grip on banks amid the growing threat of cyberattacks. The move comes as part of a broader global trend, with regulators in the US and UK also ramping up measures to combat these risks. The RBI has asked banks to provide proof of compliance with existing rules and their preparedness for AI-related risks.
API scrutiny
RBI's focus on API vulnerabilities
In a series of recent meetings, the RBI has asked banks to probe weaknesses in application programming interfaces (APIs).
These are software links that banks use to connect with non-bank lenders and fintechs.
The move comes as hackers see smaller lenders, non-bank lenders, and their third-party vendors as "softer targets."
Compliance concerns
Slow implementation of cybersecurity measures prompts RBI's intervention
Despite the RBI's directives on managing cybersecurity risk, implementation has been slow. This has prompted the regulator to push banks for stronger compliance.
The move comes after a spate of cyber incidents in India, including a data leak affecting 3,900 customers at the State Bank of India (SBI).
Warning issued
Hackers exploiting banks' API links for unauthorized transfers
India's cyber agency CERT-In has warned that hackers are stealing banks' API credentials to transfer money out of lenders' systems.
The warning comes amid reports of two Mumbai-based non-bank lenders losing about $2 million in unauthorized instant transfers from accounts held with ICICI Bank.
The transfers were made after hackers compromised the API link used for sending loan disbursal instructions to ICICI Bank.