Reserve Bank of India Deputy Governor T Rabi Sankar has called upon the banking industry to establish complete transparency in services and products while striving toward a zero-fraud environment. Speaking at the concluding session of the 21st Indian Banking Technology Conference, Sankar emphasized that earning and maintaining customer trust remains fundamental to keeping bank customers loyal to the financial system.
Transparency in Banking Services
Sankar stressed the critical importance of transparent pricing mechanisms in banking products and services. He warned that customers may seek alternative solutions if banks fail to demonstrate fair and transparent pricing structures. "It is important to understand that if we do not price things (products and services) in a manner that is transparently shown to the customer, to be fair, it is possible that customers will move to other alternatives," the deputy governor stated.
While acknowledging that India's banking system demonstrates effective pricing capabilities, Sankar noted that fundamental principles must be maintained to ensure customer confidence. He emphasized that customers need assurance that the prices they pay are reasonable and non-exploitative.
Technology's Impact on Banking Functions
The deputy governor cautioned the industry about the uncertainty surrounding traditional banking functions in the face of rapidly evolving technology. Drawing parallels to transformations witnessed in the payment domain, he highlighted how technological advancement can reshape banking operations. Sankar suggested that banks leverage technology to achieve aggregation and obtain necessary pricing efficiency in the current market environment.
He advocated for industry collaboration in developing transparent pricing systems, noting that "innovation will work best when there is collaboration, and a lot of minds are working on it." Sankar urged banks to collaborate and present suggestions for addressing pricing transparency challenges.
Current Fraud Statistics and Concerns
Sankar provided detailed insights into the current state of fraud in India's payment systems, particularly highlighting improvements in card-based transactions. He presented specific data regarding UPI fraud incidents:
| Fraud Metrics: |
Current Status |
| UPI Fraud Rate: |
0.68 per lakh transactions |
| Daily Fraud Cases: |
Approximately 4,800 transactions |
| Total Daily Transactions: |
70 crore |
While acknowledging that fraud rates appear relatively low when measured against transaction volumes, Sankar expressed concern about the absolute numbers. He emphasized that on a large user base, even small percentages translate to significant absolute numbers that pose concerns for banks and system providers.
Zero-Fraud Environment Vision
Despite the relatively low fraud rates, Sankar declared that even these levels remain unacceptable. He articulated a vision for achieving a zero-fraud environment, clarifying that while complete fraud eradication may seem unlikely, the objective itself serves an important purpose. "Trying to reach an objective of zero fraud is important for us to be constantly on our guard," he explained.
The deputy governor emphasized the need to build robust systems that minimize fraudulent events while maintaining public trust. He stressed that maintaining this trust is essential for continued development and inclusion in payment systems, ensuring that technological advancement in banking continues to benefit all segments of society.
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