WhatsApp Pay may put Indian digital banking at risk: Experts

Agencies
November 8, 2019

After WhatsApp accounts of 121 Indians were compromised by the Israeli spyware Pegasus, experts have warned that the payment feature the Facebook-owned platform is planning to launch in India may put the digital banking system at risk.

"WhatsApp payment needs to be seen with microscopic eye, primarily because in payment you will be dealing with sensitive personal data and cyber security is going to be an essential building block component for WhatsApp to demonstrate its due diligence," Pavan Duggal, one of the nation's top cyber law experts, told IANS.

The Ministry of Electronics and Information Technology (Meity) has already expressed dissatisfaction over the manner WhatsApp communicated about the compromised accounts.

The piece of NSO Group software called Pegasus allegedly exploited WhatsApp's video calling system by installing the spyware via missed calls to snoop on 1,400 users globally. The devices were compromised with just a WhatsApp video call.

In May, WhatsApp, which has 400 million users in India, urged its 1.5 billion global users to upgrade the app after discovering the vulnerability.

"WhatsApp's recent operations have shown that it's difficult for the government to get information from it. WhatsApp is an intermediary under the Information Technology Act and is mandated to exercise due diligence under the law. But it has failed to do due diligence," Duggal said.

"You should not be in a hurry to grant new licences or permission to WhatsApp without being satisfied with its adherence to cyber-security norms, international best practices and Indian laws," he said.

The Facebook-owned company is learnt to have countered the government charge that it didn't inform it about a privacy breach on the messaging platform. WhatsApp didn't even comply with the data breach notification law in India, Duggal said.

"It (WhatsApp) didn't follow reasonable security practices as mandated in Section 43A of the IT Act, 2000. In fact, it abetted the crime of un-authorised access too. Granting WhatsApp pay licence should be given a second thought by the Reserve Bank of India," said Prashant Mali, cyber lawyer at Bombay High Court.

In light of the recent hack, the government, the RBI and the National Payments Corporation of India (NPCI) is reportedly evaluating the risk of allowing social media apps into the digital payment ecosystem.

"With the government, the RBI and the NPCI planning to evaluate the risks involved in making payments via social media apps and services, the security of the UPI payment infrastructure on WhatsApp Pay has been rendered under a cloud of vulnerability," said Salman Waris, Managing Partner at TechLegis Advocates & Solicitors, a law firm.

The RBI revealed in an affidavit in the Supreme Court earlier that WhatsApp had not complied with the data localisation norms. In an April 2018 circular, the RBI stated that the data of any payment banking system have to physically located in India.

"The history of WhatsApp has shown that it's not cooperative with the government in sharing of information. If financial information is compromised, it will not only have an impact on users, but it can also have an impact on the sovereignty and security of India," Duggal said.

The government must go slow till the time WhatsApp demonstrates compliance to Indian law and showed that the platform was secure, he said.

"Because almost every phone user in India is on WhatsApp, it's all the more important for the government and the RBI to ensure that WhatsApp not only complies with the parametres of cyber security and data localisation norms, but also the IT Act and the rules and regulations thereunder.

"If WhatsApp doesn't comply with the data localisation norms, rules and regulations of the IT Act, then there is no question of granting new permission," Duggal said.

In a statement, a WhatsApp spokesperson said that safety and security of users remains the platform's highest priority.

"In May, our security team caught and stopped a cyber attack designed to send malware to mobile devices. Unable to break end-to-end encryption, this kind of malware abuses vulnerabilities within the underlying operating systems that power our mobile phones," the WhatsApp spokesperson said.

"Technology companies are constantly working to stay ahead of these kind of challenges through updates and patches. The safety and security of our users remains our highest priority, which is why in May we blocked the attack and have taken action in the courts to hold NSO accountable," the statement added.

Facebook filed a lawsuit against Israel's NSO Group last month. According to Facebook, the NSO Group violated laws, including the US Computer Fraud and Abuse Act.

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April 22,2024

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The BJP has opened its account in the ongoing Lok Sabha elections. The party's candidate from Gujarat's Surat constituency, Mukesh Dalal, has won the polls as all his opponents are now out of the fray.

BJP's Mukesh Dalal elected unopposed from the Surat Lok Sabha seat after all other candidates withdrew from the contest, the party's Gujarat unit chief CR Paatil said today. Today was the deadline for withdrawing nominations.

The nominations of the Congress party's Surat candidate and his substitute were rejected by the returning officer over alleged discrepancies in paperwork, a development that the Congress called an attempt at "match-fixing".

"Surat has presented the first lotus to Prime Minister Narendra Modi. I congratulate our candidate for Surat Lok Sabha seat Mukesh Dalal for getting elected unopposed," Mr Paatil posted on the microblogging website X, referring to the BJP's election symbol.

Eight candidates - seven of them independents - and Pyarelal Bharti of the Bahujan Samaj Party (BSP) withdrew their papers.

The nomination papers of the Congress's Surat candidate Nilesh Kumbhani was rejected on Sunday after the district returning officer Saurabh Parghi found discrepancies in the signatures of the proposers.

The nomination form of Suresh Padsala, the Congress's substitute candidate from Surat, was also found invalid.

The returning officer had said the four nomination forms submitted by the two Congress candidates did not appear genuine. The proposers, in their affidavits, had said they had not signed the forms themselves, the returning officer said in the order.

Congress lawyer Babu Mangukiya said the party will approach the high court and the Supreme Court for relief.

Congress leader Jairam Ramesh in a post on X said the Surat developments indicate "democracy is under threat". "Our elections, our democracy, Babasaheb Ambedkar's Constitution - all are under a generational threat. This is the most important election of our lifetime," Mr Ramesh said.

Mr Ramesh alleged the "distress" of micro, small and medium enterprise (MSME) owners and the business community in PM Modi's "Anyay Kaal" and their anger have "spooked the BJP so badly that they are attempting to match-fix the Surat Lok Sabha polls, which they have won consistently since the 1984 Lok Sabha elections."

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April 11,2024

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Real estate tycoon Truong My Lan was sentenced Thursday to death by a court in Ho Chi Minh city in southern Vietnam in the country's largest financial fraud case ever, state media Thanh Nien said.

It's a rare verdict - she is one of very few women in Vietnam to be sentenced to death for a white collar crime, i.e. looting one of the country's largest banks over a period of 11 years.

The decision is a reflection of the dizzying scale of the fraud. Truong My Lan was convicted of taking out $44bn (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27bn, a sum prosecutors said may never be recovered. Some believe the death penalty is the court's way of trying to encourage her to return some of the missing billions.

The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved.

The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five defendants were tried with Truong My Lan, who denied the charges.

"There has never been a show trial like this, I think, in the communist era," says David Brown, a retired US state department official with long experience in Vietnam. "There has certainly been nothing on this scale."

The trial was the most dramatic chapter so far in the "Blazing Furnaces" anti-corruption campaign led by the Communist Party Secretary-General, Nguyen Phu Trong.

A conservative ideologue steeped in Marxist theory, Nguyen Phu Trong believes that popular anger over untamed corruption poses an existential threat to the Communist Party's monopoly on power. He began the campaign in earnest in 2016 after out-manoeuvring the then pro-business prime minister to retain the top job in the party.

 The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed. Now one of the country's richest women has joined their ranks.

Truong My Lan comes from a Sino-Vietnamese family in Ho Chi Minh City, formerly Saigon. It has long been the commercial engine of the Vietnamese economy, dating well back to its days as the anti-communist capital of South Vietnam, with a large, ethnic Chinese community.

She started as a market stall vendor, selling cosmetics with her mother, but began buying land and property after the Communist Party ushered in a period of economic reform, known as Doi Moi, in 1986. By the 1990s, she owned a large portfolio of hotels and restaurants.

Although Vietnam is best known outside the country for its fast-growing manufacturing sector, as an alternative supply chain to China, most wealthy Vietnamese made their money developing and speculating in property.

All land is officially state-owned. Getting access to it often relies on personal relationships with state officials. Corruption escalated as the economy grew, and became endemic.

By 2011, Truong My Lan was a well-known business figure in Ho Chi Minh City, and she was allowed to arrange the merger of three smaller, cash-strapped banks into a larger entity: Saigon Commercial Bank.

Vietnamese law prohibits any individual from holding more than 5% of the shares in any bank. But prosecutors say that through hundreds of shell companies and people acting as her proxies, Truong My Lan actually owned more than 90% of Saigon Commercial.

They accused her of using that power to appoint her own people as managers, and then ordering them to approve hundreds of loans to the network of shell companies she controlled.

The amounts taken out are staggering. Her loans made up 93% of all the bank's lending.

According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong, more than $4bn (£2.3bn) in cash from the bank, and store it in her basement.

That much cash, even if all of it was in Vietnam's largest denomination banknotes, would weigh two tonnes.

She was also accused of bribing generously to ensure her loans were never scrutinised. One of those who was tried used to be a chief inspector at the central bank, who was accused of accepting a $5m bribe.

The mass of officially sanctioned publicity about the case channelled public anger over corruption against Truong My Lan, whose fatigued, unmade-up appearance in court was in stark contrast to the glamorous publicity photos people had seen of her in the past.

But questions are also being asked about why she was able to keep on with the alleged fraud for so long.

"I am puzzled," says Le Hong Hiep who runs the Vietnam Studies Programme at the ISEAS - Yusof Ishak Institute in Singapore.

"Because it wasn't a secret. It was well known in the market that Truong My Lan and her Van Thinh Phat group were using SCB as their own piggy bank to fund the mass acquisition of real estate in the most prime locations.

"It was obvious that she had to get the money from somewhere. But then it is such a common practice. SCB is not the only bank that is used like this. So perhaps the government lost sight because there are so many similar cases in the market."

David Brown believes she was protected by powerful figures who have dominated business and politics in Ho Chi Minh City for decades. And he sees a bigger factor in play in the way this trial is being run: a bid to reassert the authority of the Communist Party over the free-wheeling business culture of the south.

"What Nguyen Phu Trong and his allies in the party are trying to do is to regain control of Saigon, or at least stop it from slipping away.

"Up until 2016 the party in Hanoi pretty much let this Sino-Vietnamese mafia run the place. They would make all the right noises that local communist leaders are supposed to make, but at the same time they were milking the city for a substantial cut of the money that was being made down there."

At 79 years old, party chief Nguyen Phu Trong is in shaky health, and will almost certainly have to retire at the next Communist Party Congress in 2026, when new leaders will be chosen.

He has been one of the longest-serving and most consequential secretary-generals, restoring the authority of the party's conservative wing to a level not seen since the reforms of the 1980s. He clearly does not want to risk permitting enough openness to undermine the party's hold on political power.

But he is trapped in a contradiction. Under his leadership the party has set an ambitious goal of reaching rich country status by 2045, with a technology and knowledge-based economy. This is what is driving the ever-closer partnership with the United States.

Yet faster growth in Vietnam almost inevitably means more corruption. Fight corruption too much, and you risk extinguishing a lot of economic activity. Already there are complaints that bureaucracy has slowed down, as officials shy away from decisions which might implicate them in a corruption case.

"That's the paradox," says Le Hong Hiep. "Their growth model has been reliant on corrupt practices for so long. Corruption has been the grease that that kept the machinery working. If they stop the grease, things may not work any more."

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April 24,2024

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Campaigning for 14 Lok Sabha seats in Karnataka going to polls in the first phase on April 26 will come to an end on Wednesday evening.

A total of 247 candidates -- 226 men and 21 women -- are in the fray for this round of voting in most of the southern and coastal districts.

It is a straight electoral contest between the ruling Congress and the BJP-Janata Dal (Secular) combine in the State.

While the Congress is contesting in all 14 seats, BJP has fielded nominees in 11, and its alliance partner JD(S) in three -- Hassan, Mandya and Kolar.

Besides the three, the segments where elections will be held on Friday are: Udupi-Chikmagalur, Dakshina Kannada, Chitradurga, Tumkur, Mysore, Chamarajanagar, Bangalore Rural, Bangalore North, Bangalore Central, Bangalore South and Chikkballapur.

The intense campaigning for the past about a month saw Prime Minister Narendra Modi and Home Minister Amit Shah leading from the front for the BJP, holding rallies and roadshows. BJP President J P Nadda, some Union Ministers and Goa Chief Minister Pramod Sawant too pitched in.

Veteran BJP leader and former Chief Minister B S Yediyurappa and the party's state president B Y Vijayendra also campaigned extensively.

Congress president M Mallikarjun Kharge, senior leaders Rahul Gandhi and Priyanka Gandhi, Chief Minister Siddaramaiah and Deputy Chief Minister D K Shivakumar and Telangana Chief Minister A Revanth Reddy were among the prominent names who led the charge for the party.

And for the JD(S), it was the 90-year-old party patriarch and former Prime Minister H D Deve Gowda and former Chief Minister H D Kumaraswamy, who led the campaign.

Chikkaballapur has a maximum number of 29 candidates, followed by 24 in Bangalore Central and Dakshina Kannada has the least number - nine.

Kumaraswamy from Mandya, his brother-in-law and noted cardiologist C N Manjunath from Bangalore Rural on a BJP ticket, erstwhile Mysuru royal family scion Yaduveer Krishnadatta Chamaraja Wadiyar from Mysore, also from the BJP, and state Congress President Shivakumar's brother and MP D K Suresh from Bangalore Rural, are among the prominent candidates in the fray in the first phase.

The state has a total of 28 Lok Sabha segments. The remaining 14 constituencies, mostly in the northern districts, will go to polls on May seven.

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