Engaging in an online business or transaction requires compliance with various laws of India. If the online business or transaction pertains to banking industry, especially online transfer and receiving of money, the applicable provisions can include the internet banking guidelines, mobile banking security practices, e-commerce regulations and compliances, risk management for card present transactions, etc.
Cyber security of banks in India is still not taken seriously. Banks are not interested in ensuring cyber security of electronic transactions. The recommendations of Reserve Bank of India (RBI) to ensure cyber security, appointment of chief information officers (CIOs), establishing a steering committee at board level, etc has remained unfulfilled. Even RBI has warned banks for inadequate cyber security.
In a significant development, the deadline for ensuring security and risk mitigation measures for card present transactions in India would come to an end on 30th September 2013. Banks that have failed to comply with these guidelines would be not only liable to be punished but they would also be required to bear the losses arising out on insecure card transactions.
Recently, the ICICI bank has launched a web application named “Pockets” in association with Facebook. The web based application would allow account holders of ICICI to use Facebook application to transfer and receive money online. However, some individual(s) have raised their doubts about the legality and security of ICICI’s pockets application. Further, it is users’ responsibility to ensure safety of their computers/devices for using this application.
The online banking system of India is still not secure. Even allegations of ICICI’s online banking system being insecure were leveled in the past. If these allegations are true, then this is a serious cyber security lapse on the part of ICICI bank and it must be addressed properly. As far as the ICICI’s Facebook application pockets is concerned, ICICI must address both cyber security and legal issues as some have demanded attention of Reserve Bank of India (RBI) in this regard.
ICICI Bank states that all banking activities will take place on the bank server only. While you see the Facebook frame, the activities will happen on ICICI Bank’s server. The bank claims that the Facebook application is as secure as their Net banking platform. Although all consumer disputes and legal claims must be directed to ICICI bank but Facebook cannot deny its liability under Indian laws, especially cyber law of India. Only time would tell how this initiative of ICICI would work for the consumers, Facebook and ICICI.