Electronic Fund Transfer System: A Legal Perspective.

The adoption of technology and its advancements have brought various fundamental and structural changes to various sectors of the economy, including the banking sector. In India, the move towards e-banking was initiated by the Reserve Bank of India (RBI) by relying upon several recommendations provided by high-level committees formed for promoting the growth of information technology in the field of banking. In the current scenario, digital payment methods have replaced conventional paper-based methods due to their costefficiency and expediency. However, it is accompanied by certain challenges, such as poor security measures followed by institutions, which in turn create reputational, operational, or legal risks as they might lead to the disclosure and misuse of sensitive personal information of customers. In order to combat such risks and meet the challenges, the legal framework needs to be strengthened and made more stringent, while specific laws governing electronic payments need to be complied with. The paper examines the relevance of the growing electronic fund transfer systems in India, issues associated with them, existing statutory provisions, and directions issued by the RBI to combat such challenges, and offers suggestions to strengthen the legal framework in order to protect customers as well as participating institutions. [ABSTRACT FROM AUTHOR]