India's cybersecurity to get a boost: Parliamentary panel recommends overarching regulatory body

In a significant move towards bolstering India's cybersecurity infrastructure, the Parliamentary Standing Committee on Finance, led by BJP's Jayant Sinha, has put forth a series of recommendations aimed at safeguarding the nation's critical IT infrastructure and networks from the rising tide of cyber threats. At the forefront of these suggestions is the establishment of a centralised and all-encompassing regulatory authority solely dedicated to cybersecurity.

The proposed regulatory authority would bear the crucial responsibility of formulating and implementing robust cybersecurity policies, guidelines, and best practices. By collaborating with state governments and private sector entities, the authority aims to leverage a collective approach to develop effective cybersecurity strategies that can better defend against cybercrime and illegal practices.

Addressing the burgeoning digital lending sector's challenges, the committee advocates the creation of a whitelisting framework for Digital Lending Agencies (DLAs) and other financial intermediaries. This measure is intended to combat fraudulent activities and promote a standardised code of conduct within the digital lending industry, thus fostering a more secure and trustworthy environment for consumers.

To enhance fraud prevention and detection in the banking sector, the panel proposes the establishment of a Central Negative Registry. This registry would consolidate vital information on fraudulent accounts and the official documents that may have been misused, empowering financial institutions with valuable insights to prevent future fraud attempts.

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In a bid to provide greater protection to consumers, the committee calls for the implementation of an automatic compensation system, similar to that devised by the Reserve Bank of India (RBI). This system would place the onus on financial institutions to promptly compensate affected customers pending further investigation and the final traceability of funds. Such a measure aims to alleviate the burdens faced by innocent customers who fall victim to cyber fraud.

Recognising the global nature of cyber threats, the panel stressed the importance of promoting supervisory cooperation and knowledge exchange with international regulators. By fostering collaboration and learning from global best practices, India can enhance its capacity to respond collectively to the ever-evolving cyber landscape. As part of this effort, the government is urged to develop "next practices" tailored to India's specific needs and requirements, aligning the nation's cybersecurity approach with its unique challenges.

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