INDIA Trends and Developments Contributed by: Nishant Joshi, Kunal Singh, Palash Bhatkoti and Vikalp Wange, Shardul Amarchand Mangaldas & Co.
Digital arrest This is an increasingly prevalent extortion scheme in which perpetrators impersonate law enforcement offi - cials and make victims believe that their hard-earned money is owed to a particular government authority; under that fear, they are then subjected to coercive acts of extortion. To lend legitimacy, perpetrators transmit doctored arrest warrants and counterfeit documentary evidence. Investment fraud This typically commences with a seemingly innocuous invitation where the victim is added to a group chat or messaging platform designed to resemble a channel operated by a reputable financial institution. Accom - plices posing as satisfied clients share fabricated testimonials, amplifying the illusion of legitimacy and success. The victim is subsequently directed to down - load a purpose-built mobile application that mimics a genuine trading platform, complete with simulated/ fabricated market data. In the initial stages, modest returns are displayed on the purported investment, reinforcing the belief that the platform is authentic and thus encouraging progressively larger deposits. Once a substantial sum has been deposited, the platform becomes inaccessible, and the perpetrators disap - pear with the funds, thus causing financial loss to the victims. Deployment of technology-oriented tools to counter new financial crimes In response to the rapid advancement of technology- enabled financial crimes, the government of India has established a suite of technology-oriented counter - measures. These initiatives are aimed at detecting, preventing and mitigating such crimes. The primary measures are outlined hereinbelow. Indian Cybercrime Coordination Centre ( I4C ) The I4C, established under the Ministry of Home Affairs (MHA), provides a comprehensive institutional framework that enables law enforcement agencies to address such crimes in a co-ordinated manner. It facilitates real-time information sharing and co-ordi - nated investigations, enabling effective action against criminal networks, including those engaged in finan - cial frauds. Critically, the I4C is designed to arrest the flow of fraudulent funds by alerting banks and digital
wallet providers in real time, thus enabling immedi - ate freezing of compromised accounts. The I4C has launched several key initiatives to combat new finan - cial crimes; the primary ones are detailed hereinbelow. • Cyber Fraud Mitigation Centre and Citizen Finan - cial Cyber Frauds Reporting & Management System (CFCFRMS): Platforms that unite banks, payment aggregators and state and Union Territory (UT) police for real-time monitoring and co-ordinat - ed action against financial fraud. • SAMANVAYA Portal: A centralised co-ordination platform for police and law enforcement agencies that is aimed at eliminating jurisdictional and infor - mational silos in investigations into such cases. It focuses on crime mapping, pattern analysis, criminal infrastructure disruption and techno-legal assistance. • SAHYOG Portal: A platform that connects law enforcement agencies with IT intermediaries to secure the data necessary for investigations. • Suspect Registry: A centralised database of suspi - cious accounts and associated identifiers shared across banks to detect fraud, block high-risk onboarding and freeze accounts. • National Cyber Crime Reporting Portal: This portal enables the public to report all categories of cyber - crime, including financial offences. Reported inci - dents are converted into First Information Reports (FIRs) and actioned by the law enforcement agen - cies of the concerned state or UT in accordance with extant law. MuleHunter . AI The Reserve Bank of India has rolled out MuleHunter. AI, a machine learning-based solution for the detection of mule accounts (ie, bank accounts used by criminals to transfer or launder illegally obtained money). The tool is designed to detect and curb the misuse of such accounts for the diversion and layering of proceeds of crime. MuleHunter.AI is currently operational across 26 banks and is being progressively scaled up. Evolution of traditional legislative mechanisms to tackle new financial crimes As the nature and sophistication of financial crime has evolved and become more nuanced, as outlined
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