Just like your income rises when you add money to it and falls when you spend it. Similarly, a nation’s growth and economy are determined by its GDP, which remains stable if the money stays within the country. It grows when foreign currency flows in and shrinks when it flows out.
Thinking why that is a point of discussion?
Well, to take your attention towards scams and cyber frauds which are increasing at significant levels these days.
On looking in-depth, it has been seen that most of the cyber scams are operated from outside India. So the money lost by Indians in such scams is eventually circulated outside India in different forms like cryptocurrency etc. This eventually leads to devaluation of the Indian Rupee resulting in inflation which again impacts the common man’s finances.
In short, such scams have not only affected the pocket of a victim but the nation too.
Looking at data, India’s GDP has dropped by 0.7% affecting the economic growth of the nation.
Now understanding the modus operandi of such scams you can relate how your negligence to such frauds has resulted in the loss of employment opportunities and slowed down the overall nation’s growth.
Scope of Cyber Frauds
Cyberfraud has become a major worldwide concern. It has not only affected individuals’ finances but the economic stability of the country as well.
Cases of increasing cyber fraud have increased considerably in the last few years. It is becoming challenging for countries affecting their GDP.
According to a top official, financial fraud losses from January to June 2024 were ₹11,269 crore. Most of those frauds originated in China or were found to have connections with Chinese entities.
Some of the scams are operated by Indians only and money is withdrawn from different accounts using ATM withdrawals. On the other hand, almost 50% of the cases are found to have their roots in China, Cambodia and Myanmar.
Now to operate such scams, scammers use mule bank accounts. These bank accounts are eventually used in illegal activities like money laundering.
As per 14C, 4000 mule bank accounts are operated every day.
Crippling Effects of the Scam
- Economic threats: Money involved in these cases can be used for terror funding and international money laundering. In more than 350 transactions between March and May, cryptocurrency worth ₹5.5 crore was bought with Indian accounts. That account was then transferred outside the country via a global cryptocurrency exchange.
- Financial Losses: The total losses of ₹11,269 crore were reported through the Cybercrime Portal. The shocking part is this amount is only of the reported cases. Just imagine the scope and losses by combining the unregistered cases.
- ATM hotspots: I4C has identified 18 such hotspots in the country where fraudulent withdrawals of money have occurred.
- Overseas transactions: There have also been reports of international withdrawals from foreign ATMs using the debit cards of mule accounts in Russia, Bangkok, Hong Kong, and Dubai.
How Mule Accounts Are Detected?
For the identification of mule accounts, MHA called a meeting with the Union Finance Ministry and the RBI. They emphasized the following information:
- Alert on unusual bank activities: Asked bank officials to alert if they notice unusual high-value transactions in low-balance accounts or accounts of salaried people.
- Identification of multiple logins: Update the system and keep checking for multiple bank account logins from a single Internet Protocol address.
What Measures are Taken by the Government to Fight against Cybercrime?
- Coordination with Financial Institutions: MHA has been in coordination with the Reserve Bank of India to detect unusual transaction activities with the bank accounts and immediately report such transactions.
- Enhanced Monitoring System: Upgrade banking systems to detect unexpected changes in transaction patterns and notify law enforcement of odd activity, particularly from international IP addresses.
- Upgrading Technology: To take swift actions against cyber fraud the reporting and management system has been linked to state police, banks, and wallets. Over 200 financial intermediaries are contributing to this effort.
- Creating Public Awareness: The government is organizing various public awareness campaigns regarding different types of fraud to reduce cybercrime.
Even the PM of the country has been warning people against such scams from time to time through his various programs. Emphasis is laid on using safe online practices and the importance of reporting suspicious activities can significantly reduce the chances of losses through these frauds.
Conclusion
Given the potential losses of over ₹1.2 lakh crore annually, cyber fraud is a serious threat to the growing economy of the country.
Although government programs and technical developments can give a ray of hope to fight against these crimes. Cooperation from people, organizations, and foreign agencies can be effected to curb cyberfrauds.
Raising awareness and enforcing strict regulations can improve India’s defense against cyberattacks and protect the GDP of the country.
In case you have been a victim of any financial fraud and need help to report your case, you can reach out to us for help. Fill in your contact details below and our team will contact you for fraud-free assistance.
