A Reserve Bank of India working group has called for the nation's banks to introduce two-factor authentication for online banking and recommended a move to Chip-only card transactions at the ATM and point-of-sale.
The proposals are part of a glut of recommendations on operational and technology risk, IT governance, and cyber-security produced by a working party convened by the central bank in April last year.
In an extended passage devoted to information security issues, the report states that "in view of the proliferation of cyber attacks and their potential consequences, banks should implement two-factor authentication for critical activities like fund transfers and changing customer related details through Internet banking facility".
The working group further goes on to recommend that the RBI "consider moving over to chip based cards along with requiring upgradation of necessary infrastructure like ATMs/POS terminals in this regard in a phased manner".
In a brief statement accompanying the release of the report, the central bank says: "The Reserve Bank will begin implementing the recommendations of the working group shortly."
Read the full set of recommendations:Download the document now 159.3 kb (PDF File)