Zerodha CEO Nithin Kamath Warns Of Digital Fraud Surge, Backs Sebi And RBI's New Initiatives

Nithin Kamath, Zeroda’s co-founder and CEO took to X to post about the huge numbers of digital frauds and mentioned how the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are trying to educate people about these frauds and bring measures to prevent them.

“The sheer number and variety of digital frauds is astounding. It's fair to assume that things will only get much worse from here, thanks to artificial intelligence (AI). Both Sebi and RBI are trying to educate people and implement measures to combat these frauds.

Sebi has published a consultation paper proposing unique UPI IDs for brokers to ensure that investors transfer money only to Sebi-registered brokers and not to scammers using UPI IDs with broker names. Yesterday, the RBI announced that it would implement the "http://bank.in" domain exclusively for Indian banks, aiming to counter the numerous phishing sites that mimic legitimate bank websites,” read his tweet. 

“Reserve Bank shall implement the 'bank.in' exclusive Internet Domain for Indian banks. Registration of this domain name will commence from April this year. This will help avoid banking fraud. This will be followed by the ‘fin.in’ domain for the financial sector,” RBI Governor, Sanjay Malhotra had said in his statement on the occasion of the monetary policy meet on February 7. 

A few days ago Sebi proposed the introduction of a unique UPI address for the collection of money from investors through registered intermediaries, a move that will ensure that payments reach only Sebi-registered intermediaries. 

Many scamsters make use of phishing to dupe people. Such scams happen when people click on a fake website that resembles a bank website. With a bank.in domain, people can avoid such fraud by checking the domain. 

According to RBI data in 2023-24, the share of internet and card frauds made up a majority of frauds. The total stood at 44.7 per cent in terms of amount and 85.3 per cent in terms of the number of cases.

Kamath also mentioned the proliferation of fake apps that mimic banks, brokers, and payment apps and said that something needs to be done about these apps too.

To stay protected from this scam, one should download apps only from official app stores. One should also be cautious of suspicious messages or links that solicit one to download an app. One should also regularly check their bank transactions for any usual activity.