By- Ashmita Jain

In an economy, the bank plays a vital role in handling cash, credit, and other financial transactions. Banks are that financial institutes that accept deposits to lend them money for investment or credit purposes.

The said deposit can be withdrawn on demand or by a cheque, order, bank draft, or by any other means. As the banks play such an important role in the economy, thereby it is under the regulation of the Reserve Bank of India (R.B.I.), which is the apex body of banks in India.

 The banking history starts from the first-ever bank in India, the General Bank of India, which was established in the year 1786. After this came Hindustan and Bengal’s bank.

In the present time, there are various types of banks such as private sector banks, public sector banks, co-operative banks, agricultural banks, regional rural banks, the central bank, state banks, commercial banks, investment banks, and many other types of banks.

The banks cannot operate or function in the country unless the Reserve Bank of India grants a license to them and if such granted license is canceled than such a bank is forbidden to function as a bank and is closed.

All banks have to abide by banking regulations and guidelines which are given by R.B.I. and also have to function under the legal provisions as per various acts applicable to them like Banking regulation act, 1949; Negotiation Instrument Act, 1881; The Reserve Bank of India Act, 1934; Insurance Act, 1938; Limitation Act, 1963; Banking Laws (Co-operative Societies) Act, 1965; SARFAESI, 2011 and various other acts so applicable.

This helps in keeping a database for yearly analysis to measure growth and improvement. Also, it helps to prevent fraud and scams in the banking sector and increases customer creditability and trust in the Indian Banking system.

E-Banking or Electronic Banking in simple words means financial transactions through banks virtually that is without being physically present at the bank, as an exchange of money or transferring money from one bank account to another bank account with help of the internet on a laptop, computer, or even through a mobile application.

The benefit of E-banking is that there are no fixed working hours, it is accessible 24/7 and from anywhere in the world. Thereby expanding its boundary from just four walls and is being a virtual blessing for especially dealing in different time zones like imports and exports, businessmen, and other busybodies like the corporate sector and students.

Most banks in the present time provide banking services through both physical offices i.e. traditional approach as well as through their web site.

Fraud can be defined as “when a person intends to take dishonest benefit from another person or when a person omits an act or conceals a fact due to which another person bears wrongful loss or wrongful gain to person who acts or omits to do an act”.

Fraud is defined under section 17 of The Indian Contract Act, 1872. Fraud is also referred to under section 421 of the Indian penal code, 1860.

Now, we talk about e-frauds related to banks  and online transactions. 

  1. Phishing Scam

In this type of scam, a person, a scammer or a fraudster, asks for your confidential information and personal details regarding your bank account or credit card, it could be a password, PIN, Expiry date of Card, CVV number, username, OTP any other detail necessary to make a transaction from victim’s bank account to scammer’s bank account.

In most cases the scammer contacts through email, phone calls, messages (text or social media), or even through a web page. They pretend to be a member of the bank in which your account is there and asks for personal information on urgent bases, like “there is some kind of problem in your bank account or credit card which need to be resolved immediately and if not done there will be serious consequences to it and probable loss.” 

Then they use that information to steal your hard-earned money from your bank account.

The scammers are able to cheat people and get information mostly because the phishing web page or email looks similar to the original, same logo, color combinations, or in case of phone calls and text messages they have already gathered information about their target, to convince them.

Now the question comes, how to shield ourselves from such a scam where they misrepresent themselves as officials.

Here are a few things that an official from the bank would never ask you for are as follow:

  • A banker would never ask from its customer, his/her personal details over an e-mail or phone call such as password, Pin or CVV. If someone asks you it’s a red flag, don’t tell.
  • A bank official e-mail with a link attached to it that takes victim to a website where you are required to fill your confidential bank details is a scam because no bank would need you to do that.
  • Bank officials do not send to your home their member(s) for collecting money to deposit or for a matter credit card to collect.
  • Banker would not ask its customer to transfer money from his/her original account to new account.
  •  Bankers do not call their customer to convince them to buy expensive commodities or for a matter jewellery, diamonds or any land.
  • No banker wants its’ customer to run an online test transaction, it’s a scam!
  • A bank has only one official application and website, and no banker would ask its’ customer to do an online transaction or use any service of bank by any other website or application other than the bank’s official one.

In identity, theft scammer uses another person’s identity to do the scam/ fraud. It is much easier for him to pretend as someone else than coming up with a new identity. When a fraudster commits the fraud, he aims at the target’s address, name, email id and information regarding the target’s card (debit/ credit) and bank account details.

The fraudster gathers such personal information by hacking through the internet or in some cases even with help of basic technique “a cheque, paper statement, document purloin from mail or even from the trash.

After getting the required information, the fraudster uses it for making payments, in the target’s name; it could be paying bills or purchases by using the target’s credit card details.

Spoofing is a type of fraud where a fraudster pretends to be someone else and with the aim of gaining your trust, so that fraudster can access your data or computer system, to spread malware, or get his hands on your data/ information or cash.

There are various types of spoofing, namely as follow:

“Email Spoofing”, “Website or URL Spoofing”, “Caller ID Spoofing”, “Text Message Spoofing”, “GPS Spoofing”, “Man in the Middle Attacks”, “Extension Spoofing”, “IP Spoofing, Facial Spoofing”

Spyware is a software, a type of malware, which infiltrates in the victim’s computer system without his/her knowledge. Once it is in the victim’s computing device/ system it starts gathering information, can be personal, sensitive, and confidential and also regarding your internet history and data usage.

This software is particularly created to cause scathe to the victim’s computer system and to gather information. Spyware is capable of even changing the setting of his/her device as well as can also download new files to assist its purpose of stealing information.

Attackers use such software to collect internet surfing data to sell to external users like advertising companies or data analyzers whereas other than that it can also collect your card and bank details to steal the money. It can also steal the victim’s identity details which assist in committing identity theft.

Spyware runs in background without target’s knowledge and tracking and monitoring all his/her activities on device even username and passwords.

To protect your device from such malicious software, keep your system updated and if possible, use anti-virus software to keep your system secure other than that use complex and difficult and use secure sites which starts with “https” or sites with having a lock icon at bottom of it.

In this type of fraud, the fraudster feigns an individual or a buyer to make them a payment of a business deal deceptive to a bank account owned and operated by the fraudster. As the payment is made through online transactions that is an account for account payment (Real-time payment) it can’t be undone thereby the payment is irrevocable and till the time target realizes, the fraudster goes away with the money.

The person the deceived by making the payment made by a person looks like an official payment made for legitimate work like school fees, payment to contractor, or worker. It is a copy of the original thereby payment is made to the fraudster instead of legitimate payee.

In this type of fraud, the fraudster creates a dummy shopping site with comparatively attractive and low prices. When the legitimate customer places an order on this site, fraudster use stole credit card details to make an order to real retailer.

The main motive of the fraudster is to collect card details from dark markets or from stolen cards and make legitimate use of it so that no red flag is raised. The purchase though is sending to the customer but the fraudster wrongfully gains the amount and buyers pay double the amount.

In such cases chances to get caught in making illegitimate payment to buy the product is generally on buyer and real retailer and fraudulent get away with it.

In this type of fraud, a fake website is made by the scammer. The web site works as a pop website, scammer installs such a website on an internet server or in a computer system. When a person is surfing on the internet and goes through that server, those malicious websites open automatically without a click on any link or against his/her will.

The aim of such a website is to lure the target into a trap where he/she reveals its credit/ debit card details or bank details which could be used to further take away the target’s money or make payments in their name i.e. identity theft.

The difference between phishing and pharming is, in phishing scammers hopes that you will go the false link, that is, you have an option to open the link or not whereas in pharming the malicious web site opens without any consent thereby scammer.

To protect yourself from such scams it is advised to install an “anti-virus” and “anti-malware in your computer system.

  • Man In the Middle Attack:

In this type of scam, the scammer first finds a weakly secured or without password “Wi-Fi router”. These type of Wi-Fi connections are generally found in Malls, shops, Café, in general, public places which give free Wi-Fi. It can be an office Wi-Fi too with a poorly secured password.

Once, such a week router is found by the scammer he, in addition, deploy his tools and get access to target’s data. The site’s target is surfing can also be tracked by a scammer through installing a tool in between the site visited and the device of the target.

In this way he records/ captures the banking details and credit card details of the target, to later commit financial fraud and identity theft. You can save yourself from such a scam by using end to end encrypted data.


In today’s life the internet is part of our life. It is more like a need than a luxury for us. It is a wonderful thing with so vast information, a great platform for expressing one’s thought, for communication, for selling and buying, for advertising, and even for transacting money.

There was a time when the bank was reluctant to use the online banking system but now all banks with ease of competition and also with increasing complexity more preferably use the online banking system as an extension of the traditional banking system.

It is even helpful and like a blessing for busybodies like students, business entities, exporters, importers, and corporation body. As it does not have time limits, geographical boundaries, and of course do not have wait in long questions, all the things are a few clicks away.

As good as it sounds it does have its own disadvantages and dangers in disguise. Most of the people suffer due to lack of awareness and knowledge. Scammer generally tends to target the senior citizen group who are less experienced with technology.

Though is a need for stricter laws and smarter applications which cannot be hacked easily. There are scammers and fraudsters waiting for us to be careless and make mistakes so that they can get their hands on our hard- earned money.

Keep yourself updated with the latest technology, information and guidelines. Keep your password, PIN, and other sensitive information safe and do not share it with anyone. Use reliable and authentic sites with end to end encryption. The precaution today will keep your money safe tomorrow.


  1. https://shodhganga.inflibnet.ac.in/bitstream/10603/114179/3/chapter-3.pdf
  2. https://www.slideshare.net/rohitchanda/e-banking-in-india-15655155
  3. https://gradeup.co/history-of-banking-in-india-i-e02deb86-f4ac-11e5-b410-2f0cca4d3c07
  4. https://www.imsindia.com/bank-exam/blog/reforms-banking-list-acts
  5. https://www.gfsc.gg/consumers/scams/banking-
  6. https://threebearings.com/you-should know/articles/reduce_your_risk_of_identity_theft.cfm
  7. https://www.malwarebytes.com/spoofing/
  8. https://us.norton.com/internetsecurity-how-to-catch-spyware-before-it-snags-you.htmL
  9. https://www.webroot.com/in/en/resources/tips-articles/malware-credit-card-fraud
  10. https://www.fico.com/blogs/what-authorised-push-payment-fraud
  11. https://www.clearhaus.com/blog/fraud-in-ecommerce/
  12. https://www.kaspersky.co.in/resource-center/definitions/pharming


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