Banks flouted cyber-insurance laws for 5 years, reveal experts

In the wake of the 32 lakh ATM cards being compromised, the spotlight is on the need for measures such as cyber security insurance. Speaking to DTNext, V Rajendran, the immediate past President of the Chennai-based non-profit group, Cyber Society of India, refers us to the G Gopalakrishnan Committee Report of the Reserve Bank of India, issued in April 2011, which had directed banks to obtain cyber security insurance against hacking, DDOS and other cyber-attacks. However, since 2001, very few banks had actually implemented this particular provision. At present, there are very few non-life insurers who have cyber insurance offerings and some of them include ICICI Lombard, Bajaj Allianz, HDFC Ergo and Tata AIG.  SBI General is also planning to come up with a cyber insurance product soon.  As per industry estimate, the current market size of liability insurance is Rs 1,800 crore of which cyber insurance could be 5-7 per cent.   

Concerned over the biggest-ever breach of debit card data, a parliamentary panel will examine various security issues related to payments in the banking sector and has asked government officials and representatives of some banks to appear before it.

As many as 32.14 lakh debit cards data was compromised and 641 customers across 19 banks were duped of Rs 1.3 crore using stolen debit card data.  The Parliamentary Standing Committee on Finance, which is scheduled to meet later this week, has asked officials from the Finance Ministry, the Corporate Affairs Ministry and various banks to appear before the panel, which is be headed by Congress MP Veerappa Moily. 

Representatives of State Bank of India, HDFC Bank, ICICI Bank and Yes Bank have been asked to brief the panel on “security-related issues concerning payments in the banking sector,” according to a Lok Sabha secretariat notice. The notice said the panel will also be briefed by representatives of the Department of Financial Services from the Finance Ministry and the Corporate Affairs Ministry. The Reserve Bank of India has also initiated forensic audit to investigate the entire matter. The suspected security breach happened through a malware in the systems of Hitachi Payments Services.