RBI will begin using the DAKSH platform on January 1 to detect digital financial frauds

The RBI has announced to transfer the fraud reporting module to DAKSH, the Reserve Bank’s advanced digital supervisory monitoring system, as of January 1. This would introduce a new digital mechanism to check financial frauds while streamlining grievance redressal, reporting, improving efficiency, and automating the payments fraud management process.

In March 2020, the RBI began accepting reports of payment fraud from scheduled commercial banks and non-bank Prepaid Payment Instrument (PPI) issuers, launching the Central Payments Fraud Information Registry (CPFIR). The RBI stated in a circular that “…entities shall commence reporting of payment frauds in DAKSH from this date (January 01, 2023).”

DAKSH offers additional functionalities, such as a maker-checker facility, online screen-based reporting, an option for requesting more information, the facility to issue alerts/advisories, the generation of dashboards and reports, in addition to the existing bulk upload facility to report payment frauds.

According to the RBI note, all PSOs / providers and payment system participants operating in India that are authorised by the RBI are obligated to disclose any attempted or actual payment fraud, regardless of value, whether it was discovered by the entity or reported by a customer. This reporting was formerly made possible by the Electronic Data Submission Portal (EDSP), however it is currently being moved to DAKSH.

According to the central bank, entities won’t be allowed to submit any payment frauds in EDSP after payment fraud reporting in DAKSH goes online on January 1, 2023. The issuer bank/PPI issuer/credit card issuing NBFCs, whose issued payment instrument has been utilised in the fraud, must be responsible for submitting the reported payment fraud transactions, the RBI stated.