Rising Concerns: Aadhaar-Enabled Payment System (AEPS) Exploited for Banking Fraud

Key Takeaways:

1. Locking Aadhaar biometrics is crucial to prevent the misuse of Aadhaar data.

2. Victims of AEPS fraud should immediately contact the bank’s customer care, request account block, and report the incident to the authorities.

3. Recommendations provided by Bank Bachao Desh Bachao Manch include issuing instructions to banks, stopping the default availability of AEPS for cash withdrawal, and implementing proper systems for AEPS usage.

The rise in Aadhaar-related banking fraud is a concerning issue that has been observed in India. The Aadhaar-enabled Payment System (AEPS) has been exploited by cybercriminals, leading to innocent depositors losing their hard-earned savings through fraudulent activities. The civil society platform, Bank Bachao Desh Bachao Manch, has raised concerns about this issue and has taken steps to address it. In this document, we will discuss the details of the Aadhaar-related banking fraud, the implications of the fraud, and the measures that individuals can take to protect themselves, including locking their Aadhaar biometrics.

Aadhaar-Related Banking Fraud

The Aadhaar-enabled Payment System (AEPS) in India has become a target for cybercriminals, resulting in fraudulent activities that have caused financial losses to innocent depositors. The exploitation of AEPS has raised concerns about the security and integrity of the system. The forum, Bank Bachao Desh Bachao Manch, has highlighted the direct responsibility of banks in this fiasco, emphasizing that thousands of innocent depositors have suffered financial losses due to frauds using the AEPS.

Locking Aadhaar Biometrics

To prevent the misuse of Aadhaar data, it is essential for individuals to lock their Aadhaar biometrics. The biometrics can be locked using the m-Aadhaar app or the Unique Identification Authority of India (UIDAI) website.

Here are the steps to lock Aadhaar biometrics online:

1. Visit the UIDAI website or the direct link for Aadhaar lock/unlock: UIDAI Website

2. Click on the ‘My Aadhaar’ tab and under the ‘Aadhaar services’, select ‘Aadhaar lock/unlock’.

3. Enter the Aadhaar number or Virtual ID (VID).

4. Enter the captcha and click on “Send OTP”.

5. Enter the OTP received on the registered mobile number.

6. Click the ‘Enable’ button after entering the four-digit security code displayed on the screen.

Once the biometrics information is locked, individuals will need to unlock it in order to use it again. After locking their UID, UID Token, or ANCS Token for biometric, demographic, or OTP-based authentication, residents can use their 16-digit VID Number to authenticate for all methods of authentication.

Steps to Take if a Victim of AePS Fraud

If someone has fallen victim to AePS fraud but has not locked their biometric information, there are immediate steps that can be taken:

1. Contact Bank’s Customer Care: Report fraudulent transactions to the bank’s hotline number.

2. Account Block: Request the bank to temporarily block the account to prevent unauthorized transactions if there are suspicions of ongoing misuse or fraud.

3. Notify the Authorities: Report the fraud incident to the bank, file a police complaint, and report the incident to the National Cyber Crime Reporting Portal (Cyber Crime Reporting Portal). Victims also have 90 days to raise a chargeback (reversal) on the transaction and should approach their bank for this.

Recommendations to Address the Fraud

The Bank Bachao Desh Bachao Manch has provided recommendations that, if adopted, could help in addressing the fraud to a large extent. These recommendations include:

Issuing instructions to all banks not to coerce customers to submit Aadhaar Card while opening bank accounts, as it is not mandatory as per extant instructions.

Not discouraging customers/account holders to delink their Aadhaar number from their accounts and facilitating such requests promptly.

Stopping the system of opening accounts on the e-KYC platform and reverting to the normal account opening system using other KYC address proof documents.

Making the AEPS system of cash withdrawal not available by default and implementing proper systems so that unless a customer specifically opts for AEPS, the flag should be off for the rest of the customers.

Enabling separate flags for AEPS for accounts opened at CSPs for customers who require AEPS for cash withdrawal for availing DBT, etc.

Incorporating checkpoints at various points that are soft targets for fraudsters to get access to fingerprints, such as offices of Registrars, mobile SIM vending outlets, ration shops, etc.

Conclusion

The rise in Aadhaar-related banking fraud is a serious issue that requires immediate attention and action. Locking Aadhaar biometrics, reporting fraudulent transactions, and following the recommendations provided by Bank Bachao Desh Bachao Manch are crucial steps in addressing this issue and protecting individuals from potential fraud.

FAQ

Q1: How can I protect myself from Aadhaar-related banking fraud?

A1: Lock your Aadhaar biometrics to prevent misuse and report any fraudulent transactions to your bank and the authorities.

Q2: What should I do if I become a victim of AEPS fraud?

A2: Contact the bank’s customer care, request account block, and report the incident to the authorities and the National Cyber Crime Reporting Portal.

Q3: What are the recommendations to address Aadhaar-related banking fraud?

A3: Recommendations include issuing instructions to banks, stopping default availability of AEPS for cash withdrawal, and implementing proper systems for AEPS usage.