Who Bears The Loss? Re-thinking Liability In India’s Digital Banking Ecosystem

Cyber Fraud and the Allocation of Loss

India’s digital payments ecosystem has witnessed remarkable growth over the past decade, driven by the widespread adoption of internet banking, Unified Payments Interface (UPI), mobile banking applications and real-time payment systems. While these innovations have transformed financial accessibility and convenience, they have also altered the nature of cybercrime. Today’s fraudsters rarely attack banking infrastructure directly; instead, they exploit vulnerabilities within the broader authentication ecosystem through SIM swap fraud, phishing, vishing, malware-enabled credential theft and sophisticated social engineering attacks. In many instances, the technology itself functions exactly as intended, but the surrounding network of telecom operators, financial institutions and end-users becomes the point of compromise.