NEW DELHI: Amid a sharp rise in financial fraud and online scams, the government is considering the establishment of a fast-track court mechanism under the Ministry of Home Affairs (MHA) to ensure swift resolution of cybercrime cases. The Ministry of Electronics and Information Technology (MeitY) conveyed this development to the Parliamentary Standing Committee on Communications and Information Technology on March 7.
Cyber Awareness and Growing Digital Payments
As part of its preventive approach, MeitY is actively implementing the Information Security Education and Awareness (ISEA) Project to create awareness about cyber hygiene and security among the masses while also developing skilled professionals in the field.
India’s digital payments ecosystem has expanded significantly due to coordinated efforts between the government and key stakeholders. According to MeitY, the total volume of digital payment transactions increased from 2,071 crore in FY 2017-18 to 13,462 crore in FY 2022-23 and had already crossed 7,437 crore transactions by September 24, 2023. This growth is expected to more than triple by 2025, driven by smartphone penetration, post-COVID digital adoption, and financial inclusion initiatives.
However, cyber fraud cases remain a major challenge, with financial fraud complaints comprising over 60% of all cybercrime cases reported on the National Cybercrime Reporting Portal (NCRP). Data from the Indian Cyber Crime Coordination Centre (I4C) revealed a 128% increase in cyber fraud incidents in 2022 compared to 2021, raising serious concerns.
Need for a Multipronged Approach to Tackle Cybercrime
Acknowledging the complexity of cyber fraud cases, the committee emphasized the need for a multipronged approach rather than relying solely on punitive measures, which are often lengthy and less effective. It urged various ministries to work in coordination and implement preventive measures to curb cyber fraud, calling for a timely action plan.
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The committee had earlier highlighted that Android smartphones are particularly vulnerable to malware attacks due to the presence of side-loading installation features, which cybercriminals exploit to distribute malicious financial apps. In response, MeitY noted that efforts are underway to address this issue and enhance cybersecurity across digital platforms.
Coordinated Efforts to Combat Online Financial Fraud
To strengthen cybercrime enforcement, the MHA is working closely with multiple ministries and regulatory bodies, including DoT, TRAI, TSPs, ISPs, NPCI, NCIIPC, SEBI, banks, and financial institutions. The I4C regularly analyzes cyber threats and issues advisories on evolving fraud tactics to state governments, law enforcement agencies, and financial institutions.
To immediately report and stop financial fraud, the government has launched the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) as part of NCRP, enabling prompt action against cybercriminals. Additionally, MeitY has set up a Cyber Fraud Mitigation Centre (CFMC) where key stakeholders—including banks, payment aggregators, telecom service providers, and law enforcement agencies—work together to tackle cyber fraud through real-time collaboration.
The Reserve Bank of India (RBI) has also implemented multiple security measures to safeguard digital payment transactions, including enhanced monitoring of online and card-based transactions.
Digital Security Audits and Fintech Market Dynamics
To mitigate cyber threats, MeitY has instructed all central ministries, state governments, and departments to conduct annual IT security audits of their infrastructure, websites, and applications. These audits are mandatory whenever there are changes to any IT component to ensure consistent cybersecurity across government platforms.
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The committee also noted that foreign-owned fintech platforms dominate India’s digital payment ecosystem, with Google Pay (36.39%) and PhonePe (46.91%) holding a combined 83.3% market share in UPI transactions (as of October-November 2023). In contrast, the indigenous BHIM UPI platform held only 0.22% market share during the same period.
To address this imbalance, NPCI BHIM Services Ltd. (NBSL) was launched as a dedicated subsidiary on October 1, 2024, with increased leadership, capital infusion, and a revamped technology stack. BHIM UPI is now expanding its partnerships with banks to increase its market share and bolster India’s domestic fintech ecosystem.
Strengthening Legal Framework Against Cybercrime
For legal enforcement, MeitY clarified that MHA is responsible for tackling cybercrime, and punitive actions will be governed under the newly enacted Bharatiya Nyaya Sanhita, 2023 (BNS), which came into effect on July 1, 2024.
Under Section 111 of the BNS, individuals or groups engaged in economic offenses or cybercrimes through organized crime syndicates face a minimum of 5 years of non-bailable imprisonment, which can extend to life imprisonment. Additionally, financial penalties range from Rs 5 lakh to Rs 10 lakh, particularly in cases where cyber fraud leads to loss of life.
Crackdown on Transnational Money Laundering
The government has also escalated scrutiny on illegal digital payment gateways and virtual accounts used for transnational money laundering. In a high-level meeting last year, I4C raised concerns with RBI and the Department of Financial Services (DFS) regarding fraudulent payment aggregators involved in online scams.
With cybercrime evolving at an alarming pace, the government’s focus remains on a balanced approach—strengthening law enforcement, enhancing public awareness, and improving digital security infrastructure to ensure a safer digital ecosystem.