The National Payments Corporation of India (NPCI), in response to the rise of online credit fraud in India, has decided to offer insurance to cardholders who fall victim to online fraud.
The NPCI is an umbrella entity of all the retail payment systems in India, and was founded in 2008, due to an initiative of the Reserve Bank of India. The NPCI acts in the benefit of all the participating banks and their customers.
With online credit fraud on an all-time high in India, and over 40% of victims not seeing any reimbursement from their banks through traditional means, the NPCI has decided to take things one step further. The NPCI has announced that they will offer insurance to cardholders for the chance they fall victim to online credit fraud.
In order to recruit an appropriate insurance company, the NPCI has opened bidding from suitable establishments. The minimum requirements needed to place a bid to be India’s credit fraud insurance company insists of 3 years of operational experience as of March 2013, a minimum claim ratio of 75% in the past 3 years, minimum gross income of Rs 250 crore (approx. $54 Million) for 2011-12 and 2012-13, and lastly, to not be blacklisted by the NPCI.
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“This is the future. Online frauds are increasing day by day. As an insurance company we have to provide solutions. We are looking at it and evaluating very closely and you will find us in this business pretty soon.” stated Tapan Singhel, MD & CEO of Bajaj Allianz, one of the companies interested in offering their services to the NPCI.
This is interesting direction, and shows the level of priority the Indian bank system is taking against online fraud and the security of their customers. With so little solutions to assist the victims of online fraud, it will be very interesting to see how this strategy will favor
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