RBI expands AFA to curb online frauds, announces new 'bank.in', 'fin.in' domains

The Reserve Bank of India (RBI) on Friday announced a slew of additional measures aimed at enhancing digital security, broadening access to government securities, and strengthening financial market infrastructure, as part of its latest monetary policy statement.

Highlighting growing concerns over cyber threats amid rapid digitalisation, RBI Governor Sanjay Malhotra said the central bank will extend the Additional Factor of Authentication (AFA) to international online payments made to offshore merchants.

The AFA, already implemented for domestic digital payments, is expected to curb rising digital frauds by adding an extra layer of security.

“The surge in digital frauds is a matter of concern, warranting action by all stakeholders,” Malhotra noted, adding that banks and non-banking financial companies (NBFCs) must continuously improve preventive and detective controls to mitigate cyber risks. Institutions have also been urged to strengthen their incident response mechanisms through periodic testing.

The RBI will implement an exclusive ‘bank.in’ internet domain for Indian banks, with registration set to begin in April. This will be followed by the introduction of the ‘fin.in’ domain, aimed at bolstering security within the financial sector.

The central bank announced the inclusion of forward contracts in government securities within its suite of interest rate derivative products.

"Over the past few years, we have expanded the suite of interest rate derivative products available to market participants to manage their interest rate risks," Malhotra said. "We shall now include forward contracts in Government securities to this suite."

This measure is expected to help insurance funds and other long-term investors manage interest rate risks more effectively across different interest rate cycles, while also facilitating efficient pricing of derivatives linked to government securities.

The RBI will allow SEBI-registered non-bank brokers to access the Negotiated Dealing System-Order Matching (NDS-OM) platform, which facilitates secondary market transactions in government securities.