Nithin Kamath, founder and chief executive officer of Zerodha, has raised concerns over the rising number of fake apps impersonating banks, brokers, and payment platforms. His comments, posted on social media platform X, follow the Reserve Bank of India's recent initiative to introduce an exclusive 'bank.in' domain for Indian banks, to tackle phishing and online fraud.
Kamath highlighted the growing variety of digital frauds and warned that artificial intelligence could further escalate the issue. While acknowledging efforts by regulatory bodies like the RBI and the Securities and Exchange Board of India, he stressed that more action is needed, particularly to combat fake financial apps that mimic legitimate platforms.
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 AI. Both SEBI and RBI are trying to educate people and implement measures to combat these frauds.
SEBI has published a consultation paper… pic.twitter.com/i1AJ6SGDe5Kamath mentioned SEBI's recently released consultation paper, proposing a unique UPI ID system for registered brokers. Under the proposal, brokers and mutual funds would be assigned UPI handles with the "@payright" identifier, followed by the bank's name.
For example, a registered broker's UPI ID might be formatted as “abc.bkr@payrighthdfc.” This initiative aims to ensure investors transfer funds only to SEBI-registered intermediaries and not fraudulent entities using deceptive UPI IDs.
Additionally, a green triangle with a thumbs-up icon would signify verified transactions, helping users differentiate between legitimate brokers and scammers.
RBI's initiative to implement the 'bank.in' domain is another step toward securing digital financial services. The move aims to prevent phishing scams, which often involve fraudulent websites mimicking bank portals. The domain will be exclusively available to Indian banks, making it easier for users to verify the authenticity of bank websites.
The registration process, managed by the Institute for Development and Research in Banking Technology, will begin in April 2025. RBI also plans to introduce a similar "fin.in" domain for non-banking financial entities.
Kamath emphasised that while these measures address website and payment fraud, regulators must also focus on removing fake financial apps, which pose a growing threat to users.
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