To reduce fraud in the Aadhaar-enabled Payment System (AePS), the Reserve Bank of India (RBI) released draft guidelines on (Wednesday) July 31, 2024. These guidelines are for banks to follow when bringing on agents who manage AePS touchpoints.
In a press release, RBI said, “To protect bank customers from such frauds, and to maintain trust and confidence in the safety and security of the system, it has been considered necessary to enhance the robustness of AePS.”
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To improve security, the RBI has proposed that banks set transaction limits for each Aadhaar-enabled Payment System (AePS) touchpoint operator according to their risk profile. Banks must also ensure that these transactions align with the operator’s risk profile and location.
Aadhaar-enabled Payment System (AePS), managed by the National Payment Corporation of India (NPCI), allows payments through Aadhaar authentication, enabling customers to transfer money by entering their Aadhaar number and using fingerprint verification.
Because the Aadhaar-enabled Payment System (AePS) doesn’t require two-factor authentication like entering a one-time password (OTP), it has made it easier for scammers to commit fraud. These criminals can steal money from bank accounts by cloning or illegally obtaining fingerprints.
Scammers have found ways to get hold of people’s biometric data, like fingerprints, from land records and property registration papers. This means they can use someone’s fingerprints without permission to access their bank accounts.
Police have also warned that some agents who perform Aadhaar-enabled Payment System (AePS) transactions for banks might be giving these fingerprint impressions to scammers.
These agents handle many transactions, and if they share or misuse fingerprint data, it makes it even easier for fraudsters to steal money from unsuspecting victims.
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The Reserve Bank of India (RBI) has instructed the National Payments Corporation of India (NPCI) and banks to make sure that each Aadhaar-enabled Payment System (AePS) touchpoint operator works with only one acquiring bank.
Also, RBI is allowing the public to provide feedback on these new rules until August 31, 2024. Banks and NPCI will have three months to follow these guidelines once they are officially issued.
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