Day: August 20, 2017

Indian It Act 2000

Indian It Act 2000

Information Technology Act 2000 Submitted To: Mr. Anant Amdekar Submitted By: Abhimanyu Mundra Bhavana Lohia Geetesh Thakur Himanshu Shah Jugal Shah Keshwanand Pandey Kirti Shahu Table of Content |Sr. No. |Particulars |Page No. |1 |Introduction of Information Technology Act, 2000 (IT Act) |3 | |2 |Advantages of IT Act |5 | |3 |Shortcomings of IT Act |6 | |4 |NASSCOM’s Contribution to IT in India |7 | |5 |Introduction to Cyber Crime |10 | |6 |Defining Cyber Crime |13 | |7 |Types of Cyber Crime |14 | |8 |Cyber Crime Statistics of India |21 | |9 |Types of Cyber Criminals |22 | |10 |Some of important Definition |23 |11 |Writing requirements |24 | |12 |Penalties for Computer Crimes |24 | |13 |Police Powers |25 | |14 |Digital Signature |26 | |15 |Possible use of E-Governance |28 | |16 |MCA21 project under E-Governance |29 | |17 |Contribution of Information Technology in Banking Sector |33 | |18 |Comparison between India & China |36 | |19 |Some Indian Case Studies |40 | |20 |Conclusion |46 | |21 |Suggestion |48 | |22 |Bibliography |49 | Information Technology Act 2000 Connectivity via the Internet has greatly abridged geographical distances and made communication even more rapid.

While activities in this limitless new universe are increasing incessantly, laws must be formulated to monitor these activities. Some countries have been rather vigilant and formed some laws governing the net. In order to keep pace with the changing generation, the Indian Parliament passed the much-awaited Information Technology Act, 2000 . As they say, “It’s better late than never”. However, even after it has been passed, a debate over certain controversial issues continues. A large portion of the industrial community seems to be dissatisfied with certain aspects of the Act. But on the whole, it is a step in the right direction for India.

The Information Technology Act 2000 regulates the transactions relating to the computer and the Internet. The objectives of the Act as reflected in the Preamble to the Act are: 1. The Preamble to the Act states that it aims at providing legal -recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as “electronic commerce”, which involve the use of alternatives to paper-based methods of communication and storage of information and aims at facilitating electronic filing of documents with the Government agencies. 2. To facilitate electronic filing of the document with the government of India. 3.

To give legal recognition to digital signature for accepting any agreement via computer. 4. According to I. T. Act 2000, any company can store their data in electronic storage. 5. To make more power to IPO, RBI and Indian Evidence act for restricting electronic crime. The General Assembly of the United Nations had adopted the Model Law on Electronic Commerce adopted by the United Nations Commission on International Trade Law (UNCITRAL) in its General Assembly Resolution A/RES/51/162 dated January 30, 1997. The Indian Act is in keeping with this resolution that recommended that member nations of the UN enact and modify their laws according to the Model Law.

Thus with the enactment of this Act, Internet transactions will now be recognized, on-line contracts will be enforceable and e-mails will be legally acknowledged. It will tremendously augment domestic as well as international trade and commerce. The Information Technology Act extends to the whole of India and, saves as otherwise provided in this Act, it applies also to any offence or contravention there under committed outside India by any person. However The Act does not apply to: 1. A negotiable instrument as defined in section 13 of the Negotiable Instruments Act,1881; 2. A power-of-attorney as defined in section 1A of the Powers-of-Attorney Act, 1882; 3. A trust as defined in section 3 of the Indian Trusts Act, 1882; 4.

A will as defined in clause (h) of section 2 of the Indian Succession Act, 1925 including any other testamentary disposition by whatever name called; 5. Any contract for the sale or conveyance of immovable property or any interest in such property; 6. Any such class of documents or transactions as may be notified by the Central Government in the Official Gazette. Advantages of I. T. Act 2000:- 1. Helpful to promote e-commerce • Email is valid • Digital signature is valid. • Payment via credit card is valid. • Online contract is valid Above all things validity in eye of Indian law is very necessary. After making IT act 2000, all above things are valid and these things are very helpful to promote e-commerce in India. 2. Enhance the corporate business

After issuing digital signature, certificate by Certifying authority, now Indian corporate business can enhance. 3. Filling online forms Providing facility of filling online forms for different purposes has become so easy. 4. High penalty for cyber crime Law has power to penalize for doing any cyber crime. After making of this law, nos. of cyber crime has reduced. Shortcomings of I. T. Act 2000:- 1. Infringement of copyright has not been included in this law. 2. No protection for domain names. 3. The act Is not applicable on the power of attorney, trusts and will. 4. Act is silent on taxation. 5. No, provision of payment of stamp duty on electronic documents NASSCOM’s contribution to IT in India:

NASSCOM is India’s National Association of Software and Service Companies, the premier trade body and the chamber of commerce of the IT software and services industry in India. NASSCOM is a global trade body with over 1100 members, of which over 250 are global companies from the US, UK, EU, Japan and China. NASSCOM’s member companies are in the business of software development, software services, software products, IT-enabled/BPO services and e-commerce. NASSCOM was set up to facilitate business and trade in software and services and to encourage advancement of research in software technology. It is a not-for-profit organization, registered under the Societies Act, 1860. NASSCOM has been the strongest proponent of global free trade in India. NASSCOM is committed to work proactively to encourage its members to adopt orld class management practices, build and uphold highest quality standards and become globally competitive. In India and around the world, NASSCOM members are participants in the new global economy and are reputed for their cutting-edge business practices and social initiatives. NASSCOM’s Vision NASSCOM’s vision is to establish India as the 21st century’s software powerhouse and position the country as the global sourcing hub for software and services. NASSCOM Membership NASSCOM welcomes as members, companies and firms that are incorporated and/or are registered in India, which have made and will make positive contributions to the IT industry in India and globally.

Member companies are expected to comply with the Association’s code of conduct. Membership Strength The membership of NASSCOM has been steadily increasing. In 1988, NASSCOM had 38 members, who together contributed close to 65 percent of the revenue of the software industry. Since then, membership of NASSCOM has grown multifold to reach over 1100 members. These members currently account for over 95 percent of the revenues of the software industry in India. Here is a list of prominent members of executive council of NASSCOM. • Som Mittal – President of NASSCOM for 2009-2010 • Pramod Bhasin – Chairman of NASSCOM(former) • Harsh Manglik -Chairman of NASSCOM for 2010-2011 • Mr. Rajendra S.

Pawar as the new Chairman of its Executive Council for the year 2011-2012 (April 26, 2011) Aims and Objectives The primary objective of NASSCOM is to act as a catalyst for the growth of the software driven IT industry in India. Other goals include facilitation of trade and business in software and services, encouragement and advancement of research, propagation of education and employment, enabling the growth of the Indian economy and provide compelling business benefits to global economies by global sourcing. NASSCOM also endeavors to leverage IT and narrow the digital divide in India and enable her citizens to enjoy the benefits of IT. It also boosts the process of Innovation; IT workforce development and enhance cyber security.

NASSCOM is achieving its objectives by following a seven fold strategy: • Partner with Government of India and State Governments in formulating IT policies and legislation. Partner with global stakeholders for promoting the industry in global markets. • Strive for a thought leadership position and deliver world-class research and strategic inputs for the industry and its stakeholders. • Encourage members to uphold world class quality standards. • Strive to uphold Intellectual Property Rights of its members. • Strengthen the brand equity of India as a premier global sourcing destination. • Expand the quantity and quality of the talent pool in India. Continuous engagement with all member companies and stakeholders to devise strategies to achieve shared aspirations for the industry and the country. Partnership with the Government NASSCOM acts as an advisor, consultant and coordinating body for the software and services industry in India. NASSCOM has representatives in various committees in the Government of India including the Ministry of Information Technology, Ministry of Commerce, the Ministry of Finance, Department of Telecommunication, Ministry of Human Resources Development, Ministry of Labor and the Ministry of External Affairs. NASSCOM also acts as a consulting body for various State Governments in India. NASSCOM has played a key role in enabling the government in India to develop industry friendly policies.

NASSCOM has been a proponent of free trade, arguing for zero tariff protection, strong intellectual property and data protection laws, deregulation of the telecom market and the creation of software technology parks and private sector participation in the education system – measures which have resulted in significant growth of the industry. NASSCOM has also been engaged with various governments overseas, to promote a win-win partnership via global sourcing. NASSCOM also plays a role in engaging with global alliances on software quality standards, immigration policies, WTO and free trade in services, and next-generation best practices in global sourcing of services. Partnership with Members NASSCOM provides value-added services to its members to grow their business and create an ecosystem which promotes growth and profitability. This includes: Forums for making business connections and sharing best practices • Participation in seminars and conferences (in India and abroad) with customer delegations • Access to world-class research and market intelligence services; and counsel from leading analysts and think tanks and consultants • Access to knowledge of global business practices (taxation, legislation, immigration policies, recruitment and branding) • Opportunity to “give back” to the society by participation in NASSCOM Foundation, IT Workforce development initiative and other digital divide initiatives Contribute in development of global standards and thought leadership in areas of IP creation, security, data protection, and next-generation software quality standards. Introduction to Cyber Crime The first recorded cyber crime took place in the year 1820!

That is not surprising considering the fact that the abacus, which is thought to be the earliest form of a computer, has been around since 3500 B. C. in India, Japan and China. The era of modern computers, however, began with the analytical engine of Charles Babbage. Cyber crime is an evil having its origin in the growing dependence on computers in modern life. In a day and age when everything from microwave ovens and refrigerators to nuclear power plants is being run on computers, cyber crime has assumed rather sinister implications. Major cyber crimes in the recent past include the Citibank rip off. US $ 10 million were fraudulently transferred out of the bank and into a bank account in Switzerland.

A Russian hacker group led by Vladimir Kevin, a renowned hacker, perpetrated the attack. The group compromised the bank’s security systems. Vladimir was allegedly using his office computer at AO Saturn, a computer firm in St. Petersburg, Russia, to break into Citibank computers. He was finally arrested on Heathrow airport on his way to Switzerland. With increased use of computers in homes and offices, there has been a proliferation of computer-related crimes. These crimes include: i) Crimes committed by using computers as a means, including conventional crimes. ii) Crimes in which computers are targets. The Internet in India is growing rapidly.

It has given rise to new opportunities in every field we can think of – be it entertainment, business, sports or education. There are two sides to a coin. Internet also has its own disadvantages. One of the major disadvantages is Cybercrime – illegal activity committed on the Internet. The Internet, along with its advantages, has also exposed us to security risks that come with connecting to a large network. Computers today are being misused for illegal activities like e-mail espionage, credit card fraud, spams, and software piracy and so on, which invade our privacy and offend our senses. Criminal activities in the cyberspace are on the rise. Success in any field of human activity leads to crime that needs mechanisms to control it.

Legal provisions should provide assurance to users, empowerment to law enforcement agencies and deterrence to criminals. The law is as stringent as its enforcement. Crime is no longer limited to space, time or a group of people. Cyber space creates moral, civil and criminal wrongs. It has now given a new way to express criminal tendencies. Back in 1990, less than 100,000 people were able to log on to the Internet worldwide. Now around 500 million people are hooked up to surf the net around the globe. “The modern thief can steal more with a computer than with a gun. Tomorrow’s terrorist may be able to do more damage with a keyboard than with a bomb”.

Until recently, many information technology (IT) professionals lacked awareness of and interest in the cyber crime phenomenon. In many cases, law enforcement officers have lacked the tools needed to tackle the problem; old laws didn’t quite fit the crimes being committed, new laws hadn’t quite caught up to the reality of what was happening, and there were few court precedents to look to for guidance? Furthermore, debates over privacy issues hampered the ability of enforcement agents to gather the evidence needed to prosecute these new cases. Finally, there was a certain amount of antipathy—or at the least, distrust— between the two most important players in any effective fight against cyber crime: law enforcement agencies and computer professionals.

Yet close cooperation between the two is crucial if we are to control the cyber crime problem and make the Internet a safe “place” for its users. In the world of cyber crime, evil bytes are fast replacing whizzing bullets. The Indian authorities are aware of the fight ahead. But the future does not look optimistic, shares experts. Life is about a mix of good and evil. So is the Internet. For all the good it does us, cyberspace has its dark sides too. Unlike conventional communities though, there are no policemen patrolling the information superhighway, leaving it open to everything from Trojan horses and viruses to cyber stalking, trademark counterfeiting and cyber terrorism.

Given the unrestricted number of free Web sites, the Internet is undeniably open to exploitation. Known as cyber crimes, these activities involve the use of computers, the Internet, cyberspace and the World Wide Web. “Any criminal activity that uses a computer either as an instrumentality, target or a means for perpetuating further crimes comes within the ambit of cyber crime,” says Supreme Court advocate and cyber law expert Pavan Duggal. While the worldwide scenario on cyber crime looks bleak, the situation in India isn’t any better. There are no concrete statistics but, according to Duggal, Indian corporate and government sites have been attacked or defaced more than 780 times between February 2000 and December 2002. Mr.

Duggal stated that, Despite the Information Technology Act, 2000, there are still several grey areas that exist within the law. “The IT Act, 2000, is primarily meant to be a legislation to promote e-commerce. It is not very effective in dealing with several emerging cyber crimes like cyber harassment, defamation, stalking and so on. ” Defining Cyber Crime Defining cyber crimes, as “acts that are punishable by the Information Technology Act” would be unsuitable as the Indian Penal Code also covers many cyber crimes, such as email spoofing and cyber defamation, sending threatening emails etc. A simple yet sturdy definition of cyber crime would be “unlawful acts wherein the computer is either a tool or a target or both”.

Information Technology Act & Indian Penal Code All cyber crimes do not come under the IT Act. Many cyber crimes come under the Indian Penal Code. • Sending threatening messages by email: Section 506 IPC • Sending defamatory messages by email : Section 499 IPC • Web-jacking: Section 383 IPC • Online sale of narcotics: NDPS Act • Online sale of weapons: Arms Act • E- mail Abuse: Section 500 IPC • Hacking: Section 66 IT Act • Pornography: Section 67 IT Act • Virus attacks: Section 43, 66 IT Act • Salami attacks: Section 66 IT Act Types of Cyber Crimes Financial crimes This would include cheating, credit card frauds, money laundering etc.

To cite a recent case, a website offered to sell Alphonso mangoes at a throwaway price. Distrusting such a transaction, very few people responded to or supplied the website with their credit card numbers. These people were actually sent the Alphonso mangoes. The word about this website now spread like wildfire. Thousands of people from all over the country responded and ordered mangoes by providing their credit card numbers. The owners of what was later proven to be a bogus website then fled taking the numerous credit card numbers and proceeded to spend huge amounts of money much to the chagrin of the card owners. Caselet: Wipro Spectra mind lost the telemarketing contract from Capital one due to an organized crime.

The telemarketing executives offered fake discounts, free gifts to the Americans in order to boost the sales of the Capital one. The internal audit revealed the fact and surprisingly it was also noted that the superiors of these telemarketers were also involved in the whole scenario. Cyber pornography This would include pornographic websites; pornographic magazines produced using computers (to publish and print the material) and the Internet (to download and transmit pornographic pictures, photos, writings etc). Recent Indian incidents revolving around cyber pornography include the Air Force Balbharati School case. A student of the Air Force Balbharati School, Delhi, was teased by all his classmates for having a pockmarked face.

Tired of the cruel jokes, he decided to get back at his tormentors. He scanned photographs of his classmates and teachers, morphed them with nude photographs and put them up on a website that he uploaded on to a free web hosting service. It was only after the father of one of the class girls featured on the website objected and lodged a complaint with the police that any action was taken. In another incident, in Mumbai a Swiss couple would gather slum children and then would force them to appear for obscene photographs. They would then upload these photographs to websites specially designed for paedophiles. The Mumbai police arrested the couple for pornography. Sale of illegal articles

This would include sale of narcotics, weapons and wildlife etc. , by posting information on websites, auction websites, and bulletin boards or 167 simply by using email communication. E. g. many of the auction sites even in India are believed to be selling cocaine in the name of ‘honey’. Phishing In computing, phishing (also known as carding and spoofing) is a form of social engineering, characterized by attempts to fraudulently acquire sensitive information, such as passwords and credit card details, by masquerading as a trustworthy person or business in an apparently official electronic communication, such as an email or an instant message.

The term phishing arises from the use of increasingly sophisticated lures to “fish” for users’ financial information and passwords. Caselet: RBI Phishing Scam: In a daring phishing attack of its kind, the fraudsters even have not spared the Reserve Bank of India. The phishing email disguised as originating from the RBI, promised its recipient prize money of Rs. 10 Lakhs within 48 hours, by giving a link which leads the user to a website that resembles the official website of RBI with the similar logo and web address. The user is then asked to reveal his personal information like password, I-pin number and savings account number. However, the RBI posted a warning regarding the fraudulent phishing e-mail on the bank’s official website. Online gambling

There are millions of websites; all hosted on servers abroad, that offer online gambling. In fact, it is believed that many of these websites are actually fronts for money laundering. Caselet: Recent Indian case about cyber lotto was very interesting. A man called Kola Mohan invented the story of winning the Euro Lottery. He himself created a website and an email address on the Internet with the address ‘[email protected] net. ‘ Whenever accessed, the site would name him as the beneficiary of the 12. 5 million pound. After confirmation a telgu newspaper published this as news. He collected huge sums from the public as well as from some banks for mobilization of the deposits in foreign currency.

However, the fraud came to light when a cheque discounted by him with the Andhra Bank for Rs 1. 73 million bounced. Mohan had pledged with Andhra Bank the copy of a bond certificate purportedly issued by Midland Bank, Sheffields, London stating that a term deposit of 12. 5 million was held in his name. Intellectual Property crimes These include software piracy, copyright infringement, trademarks violations, theft of computer source code etc. Caselet: These include software piracy, copyright infringement, trademarks violations, theft of computer source code etc. In other words this is also referred to as cybersquatting. Satyam Vs. Siffy is the most widely known case. Bharti Cellular Ltd. iled a case in the Delhi High Court that some cyber squatters had registered domain names such as barticellular. com and bhartimobile. com with Network solutions under different fictitious names. The court directed Network Solutions not to transfer the domain names in question to any third party and the matter is sub-judice. Cyber Defamation This occurs when defamation takes place with the help of computers and or the Internet. E. g. someone publishes defamatory matter about someone on a website or sends e-mails containing defamatory information to all of that person’s friends. Caselet: India’s first case of cyber defamation was reported when a company’s employee started sending derogatory, defamatory and obscene e-mails about its Managing Director.

The e-mails were anonymous and frequent, and were sent to many of their business associates to tarnish the image and goodwill of the company. The company was able to identify the employee with the help of a private computer expert and moved to the Delhi High Court. The court granted an ad-interim injunction and restrained the employee from sending, publishing and transmitting e-mails, which are defamatory or derogatory to the plaintiffs. Cyber stalking The Oxford dictionary defines stalking as “pursuing stealthily”. Cyber stalking involves following a person’s movements across the Internet by posting messages (sometimes threatening) on the bulletin boards frequented by the victim, entering the chat-rooms frequented by the victim, constantly bombarding the victim with emails etc.

Caselet: Ritu Kohli has the dubious distinction of being the first lady to register the cyber stalking case. A friend of her husband gave her telephonic number in the general chat room. The general chatting facility is provided by some websites like MIRC and ICQ, Where the person can easily chat without disclosing his true identity. The friend of husband also encouraged this chatters to speak in slang language to Ms. Kohli. Unauthorized access to computer systems or networks This activity is commonly referred to as hacking. The Indian law has however given a different connotation to the term hacking, so we will not use the term “unauthorized access” interchangeably with the term “hacking”.

Caselet: However, as per Indian law, unauthorized access does occur, if hacking has taken place. An active hackers’ group, led by one “Dr. Nuker”, who claims to be the founder of Pakistan Hackerz Club, reportedly hacked the websites of the Indian Parliament, Ahmedabad Telephone Exchange, Engineering Export Promotion Council, and United Nations (India). Sending threatening emails Caselet: A 16 year old student from Ahmadabad who threatened to blow up Andheri Railway station in an email message was found guilty by the Juvenile court in Mumbai. A private news channel received an email on 18 March 2008 claiming sender as Dawood Ibrahim gang saying a bomb would be planted on an unspecified train to blow it up.

The case was registered in Andheri Police station under section 506 of IPC and transferred to cyber crime investigation cell. During Investigation CCIC traced the cyber cafe from which the email account was created and threatening email was sent. Cafe owner told police about friends which had come that day to surf the net. Police summoned them and found that the system which was used to send email was accessed by only one customer. On 22nd March 08, police arrested the boy a Class XII science student who during interrogation said that he sent the email for fun of having his prank flashed as “breaking news’’ on television. Salami attacks These attacks are used for the commission of financial crimes.

The key here is to make the alteration so insignificant that in a single case it would go completely unnoticed. Virus / worm attacks Viruses are programs that attach themselves to a computer or a file and then circulate themselves to other files and to other computers on a network. They usually affect the data on a computer, either by altering or deleting it. Worms, unlike viruses do not need the host to attach themselves to. They merely make functional copies of themselves and do this repeatedly till they eat up all the available space on a computer’s memory Caselet: E. g. love bug virus, which affected at least 5 % of the computers of the globe. The losses were accounted to be $ 10 million.

The world’s most famous worm was the Internet worm let loose on the Internet by Robert Morris in 1988 that almost brought development of Internet to a complete halt. Logic bombs These are event dependent programs. This implies that these programs are created to do something only when a certain event (known as a trigger event) occurs. E. g. even some viruses may be termed logic bombs because they lie dormant all through the year and become active only on a particular date Trojan attacks A Trojan as this program is aptly called is an unauthorized program which functions from inside what seems to be an authorized program, thereby concealing what it is actually doing. Web jacking

This occurs when someone forcefully takes control of a website (by cracking the password and later changing it). The actual owner of the website does not have any more control over what appears on that website in a recent incident reported in the USA the owner of a hobby website for children received an e-mail informing her that a group of hackers had gained control over her website. Caselet: Recently the site of MIT (Ministry of Information Technology) was hacked by the Pakistani hackers and some obscene matter was placed therein. Further the site of Bombay crime branch was also web jacked. Another case of web jacking is that of the ‘gold fish’ case.

In this case the site was hacked and the information pertaining to gold fish was changed. Further a ransom of US $ 1 million was demanded as ransom. Thus web jacking is a process where by control over the site of another is made backed by some consideration for it. Pay-Per Click Fraud Caselet: Click fraud (sometimes called pay-per-click fraud) is the practice of artificially inflating traffic statistics to defraud advertisers or Web sites that provide venues for advertisers. In the common pay-per-click advertising model, advertisers pay a fee for each click on their link. According to a CNET News article some industry segments have costs-per-click of several dollars.

By using automated clicking programs (called hit bots) or employing low-cost workers to click the links, the perpetrators create the illusion that a large number of potential customers are clicking the advertiser’s links, when in fact there is no likelihood that any of the clicks will lead to profit for the advertiser. Click fraud scammers often take advantage of the affiliate programs offered by some Web sites, such as Google and Yahoo! Search Marketing. The scammers sign up for the affiliate programs, agreeing to provide further exposure to the advertising in question and receiving a portion of the pay-per-click fees in return. The perpetrators place the ads on Web sites created solely for this purpose that, naturally, doesn’t have any real traffic. Once the ads are in place, the hitbots or workers generate large volumes of raudulent clicks, often in a very short time period, for which the scammer bills the owner of the affiliate program. Both Google and Yahoo! Search Marketing have had to reimburse advertisers for pay-per-click fees that were discovered to have been the result of click fraud. Cyber Crime Statistics of India [pic] Source:-http://www. consumerfraudreporting. org/internet_scam_statistics. htm Types of Cyber Criminals Kids (age group 9-16 etc. ) It seems really difficult to believe but it is true. Most amateur hackers and cyber criminals are teenagers. To them, who have just begun to understand what appears to be a lot about computers, it is a matter of pride to have hacked into a computer system or a website.

There is also that little issue of appearing really smart among friends. These young rebels may also commit cyber crimes without really knowing that they are doing anything wrong. Organized hacktivists Hacktivists are hackers with a particular (mostly political) motive. In other cases this reason can be social activism, religious activism, etc. The attacks on approximately 200 prominent Indian websites by a group of hackers known as Pakistani Cyber Warriors are a good example of political hacktivists at work. Disgruntled employees One can hardly believe how spiteful displeased employees can become. Till now they had the option of going on strike against their bosses.

Now, with the increase independence on computers and the automation of processes, it is easier for disgruntled employees to do more harm to their employers by committing computer related crimes, which can bring entire systems down. Professional hackers (corporate espionage) Extensive computerization has resulted in business organizations storing all their information in electronic form. Rival organizations employ hackers to steal industrial secrets and other information that could be beneficial to them. The temptation to use professional hackers for industrial espionage also stems from the fact that physical presence required to gain access to important documents is rendered needless if hacking can retrieve those. Some of the Important Definition 1. Affixing digital signature” with its grammatical variations and cognate expressions means adoption of any methodology or procedure by a person for the purpose of authenticating an electronic record by means of digital signature; 2. “Certifying Authority” means a person who has been granted a licence to issue a Digital Signature Certificate under section 24; 3. “Certification practice statement” means a statement issued by a Certifying Authority to specify the practices that the Certifying Authority employs in issuing Digital Signature Certificates; 4. “Digital signature” means authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of section 3; 5. Digital Signature Certificate” means a Digital Signature Certificate issued under subsection of section 35; 6. “Electronic form” with reference to information means any information generated, sent, received or stored in media, magnetic, optical, computer memory, micro film, computer generated micro fiche or similar device; 7. “Secure system” means computer hardware, software, and procedure that— a) are reasonably secure from unauthorised access and misuse; b) provide a reasonable level of reliability and correct operation; c) are reasonably suited to performing the intended functions; and d) adhere to generally accepted security procedures; Writing requirements

Section 4 of the Act states that when under any particular law, if any information is to be provided in writing or typewritten or printed form, then notwithstanding that law, the same information can be provided in electronic form, which can also be accessed for any future reference. This non-obstinate provision will make it possible to enter into legally binding contracts on-line! Penalties for Computer Crimes [pic][pic] Source:- http://www. indiaitlaw. com/comcriact. htm Police Powers A police officer not below the rank of deputy superintendent of police has the power to enter any public place and arrest any person without a warrant if he believes that a cyber crime has been or is about to be committed.

This provision may not turn to be very effective for the simple reason that most of the cyber crimes are committed from private places such as ones own home or office. Cyber-cafes and public places are rarely used for cyber crimes. However, if the Act did give the police department powers to enter people’s houses without search warrants, it would amount to an invasion of the right to privacy and create pandemonium. Keeping this in mind, the Legislature has tried to balance this provision so as to serve the ends of justice and at the same time, avoid any chaos. On being arrested, the accused person must, without any unnecessary delay, be taken or sent to the magistrate having jurisdiction or to the officer-in-charge of a police station.

The provisions of the Code of Criminal Procedure, 1973 shall apply in relation to any entry, search or arrest made by the police officer. Digital Signature Digital Signature means authentication of any electronic record by a subscriber by means of an electronic method or procedure. Rapid developments in e-business pose a growing need for online security and authentication. Many emerging technologies are being developed to provide online authentication. The major concern in e-business transactions is the need for the replacement of the hand-written signature with an online signature. The traditional e-mail system, which has problems of message integrity and non-repudiation, does not fulfil the basic requirements for an online signature.

Further, since the Internet communication system is prone to various types of security breaches, the discussion of robust and authenticated e-business transactions is incomplete without consideration of ‘security’ as a prominent aspect of ‘online signatures’. One may consider an e-signature as a type of electronic authentication. Such authentication can be achieved by means of different types of technologies. A Digital Signature (DS) can be considered as a type of e-signature, which uses a particular kind of technology that is DS technology. DS technology involves encrypting messages in such a way that only legitimate parties are able to decrypt the message. Two separate but interrelated ‘keys’ carry out this process of encryption and decryption. One party in the transactions holds the secret key, or the private key, and the other party holds the public key or the key with wide access.

The selection and use of an encryption technique plays a crucial role in the design and development of keys. In short, a DS satisfies all the functions, such as authenticity, non-repudiation, and security, of a hand-written signature. Such a ‘signature’ can be viewed as a means of authentication and can be owned by an individual. While using this technology, there must be third party involvement order to handle the liability issues that may be raised by bilateral transactions. With this existing legal infrastructure and the rapid emergence of software security products, it is important to understand the role of emerging technologies like DS in e-business.

One of the major indicators of technological improvements is the market development and commercialization of that technology. Legitimacy and Use of Digital Signatures The Act has adopted the Public Key Infrastructure for securing electronic transactions. As per Section 3 of the Act, a digital signature means an authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the other provisions of the Act. Thus a subscriber can authenticate an electronic record by affixing his digital signature. A private key is used to create a digital signature whereas a public key is used to verify the digital signature and electronic record.

They both are unique for each subscriber and together form a functioning key pair. Section 5 provides that when any information or other matter needs to be authenticated by the signature of a person, the same can be authenticated by means of the digital signature affixed in a manner prescribed by the Central Government. Under Section 10, the Central Government has powers to make rules prescribing the type of digital signature, the manner in which it shall be affixed, the procedure to identify the person affixing the signature, the maintenance of integrity, security and confidentiality of electronic records or payments and rules regarding any other appropriate matters.

Furthermore, these digital signatures are to be authenticated by Certifying Authorities (CA’s) appointed under the Act. These authorities would inter alias; have the license to issue Digital Signature Certificates (DSC’s). The applicant must have a private key that can create a digital signature. This private key and the public key listed on the DSC must form the functioning key pair. Once the subscriber has accepted the DSC, he shall generate the key pair by applying the security procedure. Every subscriber is under an obligation to exercise reasonable care and caution to retain control of the private key corresponding to the public key listed in his DSC. The subscriber must take all precautions not to disclose the private key to any third party.

If however, the private key is compromised, he must communicate the same to the Certifying Authority (CA) without any delay. Possible Uses of E-Governance The future of e-governance is very bright. With the help of information technology, the daily matters can be effectively taken care of irrespective of the field covered by it. For instance, the Delhi Police Headquarter has launched a website, which can be used for lodging a First Information Report. Similarly, the Patna High Court has taken a bold step of granting bail on the basis of an online bail application. The educational institutions, including universities, are issuing admission forms electronically, which can be downloaded from their respective websites.

The results of examinations of various educational institutions, both school level and university level, are available online, which can be obtained without any trouble. These are but some of the instances of the use of technology for a better e-governance. The beneficial concept of e-governance can be utilized for the following purposes: • To have access to public documents. • For making online payments of various bills and dues. • To file statutory documents online. • To file the complaints, grievances and suggestions of citizens online. • The online facility can be used to enter into a partnership the appropriate government in cases of government contracts. • The citizens can use the online facility to file their income tax returns. The citizens will enjoy the facility of online services. MCA21 project under E-Governance Background Keeping in tune with the E-Governance initiatives the world over, Ministry of Company Affairs (MCA), Government of India, has initiated the MCA21 project, which will enable an easy and secure access to MCA services in a manner that best suits the corporate entities and professionals besides the public. MCA21 is intended to achieve all the objectives of a versatile E-Governance project. The project is named as MCA21 as it aims at repositioning MCA as an organization capable of fulfilling the aspirations of its stakeholders in the 21st century.

Rather than compelling the business community to physically travel to MCA offices, MCA services will be made available at the place of their choice, be it their homes or offices. The major components involved in this comprehensive E-Governance project are Front Office and Back Office. The MCA21 project is designed to fully automate all processes related to the proactive enforcement and compliance of the legal requirements under the Companies Act, 1956. This will help the business community to meet their statutory obligations. From the customer perspective, the Front Office operations assume significance, which would be administered through the Front Office portal.

The entire Back Office operations of the MCA would be automated so as to achieve the objective of a user friendly computerized environment. My MCA portal is the single point of contact for all MCA related services, which can be easily accessed over the Internet by all users. The project also envisages a cost effective integrated software solution for computerizing various in? house functions like Human Resources Management, Payroll, Accounting and Finance for internal users (employees) of MCA. Permanent documents of existing companies like memorandum of association, articles of association, current charge documents, are presently maintained in paper form across various Registrar of Companies (RoC) offices.

These documents are being converted into electronic format and it is being carried out at the respective RoC offices as part of this project. The scope of MCA21 project covers only the offices of RoCs, Regional Directors and the Headquarters at New Delhi. It does not include other offices of MCA like Official Liquidators, Company Law Board / Tribunal and Courts. The success of the service oriented approach, the most fundamental ingredient of this project, will depend greatly on analyzing and responding to the needs of all stakeholders. To that extent, the project will develop a mechanism to constantly develop and improve the MCA21 system.

It will be made possible by analyzing usage patterns and error/status messages as well as feedback from the customers comprising the corporate, professionals and the public. Key Benefits of MCA21 Project MCA21 seeks to fulfill the requirements of the various stakeholders including the corporate, professionals, public, financial institutions and banks, Government and the MCA employees. The key benefits of MCA21 project are as follows: a) On line incorporation of companies on line b) Simplified and easy mode of filing of Forms/ Returns c) Registration as well as verification of charges anytime and from anywhere d) Inspection of public documents of companies anytime from anywhere e) Corporate centric approach ) Building up a centralized database repository of corporate operating in India g) Enhanced service level fulfillment and customer relationship building h) Total transparency through E-Governance i) Timely redressed of investor grievances j) Availability of more time for MCA employees for qualitative analysis of corporate information An Overview of MCA set up The MCA mainly administers the Companies Act, 1956 and The Monopolies and Restrictive Trade Practices Act 1969. Besides, it also administers the following Acts: a) The Competition Act, 2002 b) The Chartered Accountants Act, 1949 c) The Costs and Works Accounts Act, 1959 d) The Company Secretaries Act, 1980 e) The Partnership Act, 1932 f) The Societies Registration Act, 1860 g) The Companies (Donation to National Fund) Act, 1951

The MCA, which functions under overall direction and supervision of the Minister of Company Affairs, has a three tier organizational set up for administration of the Act, namely, the Headquarters at New Delhi, the Regional Directors at Mumbai, Kolkata, Chennai and Noida and the RoCs in States and Union Territories. The Official Liquidators who are attached to various High Courts functioning in the country are also under the overall administrative control of the Ministry. The Company Law Board, a quasi judicial body, has its Principal Bench at Delhi, an additional Principal Bench for Southern States at Chennai and four Regional Benches located at Delhi, Mumbai, Kolkata and Chennai.

The four Regional Directors are in charge of the respective regions, each region comprising a number of States and Union Territories. They supervise the working of the offices of the RoCs and the Official Liquidators working in their regions. They also maintain liaison with the respective State Governments and the Central Government in matters relating to the administration of the Companies Act. Certain powers of the Central Government under the Act have been delegated to the Regional Directors. There is also an inspection unit attached to the office of every Regional Director for carrying out the inspection of the books of accounts of Companies under Section 209A of the Companies Act.

RoCs appointed under Section 609 of the Companies Act and covering the various States and Union Territories are vested with the primary duty of registering companies in the respective States and the Union Territories and ensuring that such companies comply with statutory requirements under the Act. These offices function as registry of records, relating to the companies registered with them, which are available for inspection by members of public on payment of the prescribed fee. The Central Government exercises administrative control over these offices through the respective Regional Directors. Services Available on MCA21 The following services will be available under the MCA21 Project: • Registration and incorporation of new companies • Filing of Annual Returns and Balance Sheets • Filing of forms for change of names/address/Director’s details • Registration and verification of charges • Inspection of documents Applications for various statutory services from MCA • Investor grievance redressed Organization of RoC Office under MCA The RoC office working from its present address will virtually become the Back Office of the Ministry. There are likely to be a number of companies/entities who may find it difficult to switch over to e-Filing at the initial stage. Facilitation Centers known as Physical Front Offices (PFOs) are being set up at 53 locations throughout the country to provide requisite comfort for e-Filing to such companies. 1. Front Office (FO) The Front Office represents the interface of the corporate and public user with the MCA21 system.

This comprises of Virtual Front Office and Physical Front Office. Virtual Front Office merely represents a computer facility for filing of digitally signed e-Forms by accessing the My MCA portal through Internet. It also pre supposes availability of related facilities to convert documents into PDF format and scanning of documents wherever required. When a company or user does not have these computer facilities, it can avail of these facilities at the designated facilitation centers, known as the Physical Front Offices. 2. Virtual Front Office (VFO) Virtual Front Office facilitates online filing of the e-Forms using Internet.

The system automatically does pre scrutiny of the e-Forms filed and indicates error messages in case of incomplete or invalid particulars. Upon successful submission, a Service Request Number (SRN) will be generated by the system for the user, which will be used for future correspondence with MCA. The system calculates the fee payable for the form and accepts online payment through credit cards and Internet banking. There is also an option to make offline payment at designated bank branches through challan generated by the system. In the latter case, the MCA system gets updated on the realizations made by the designated banks on a daily basis.

Virtual Front Office is meant for electronically delivering services at a place and time convenient to the business community through the Front Office portal. The following are the system requirements for VFO: • A Personal Computer • Web Browser – Internet Explorer, Netscape Navigator • Internet access • Adobe Acrobat Reader 7. 0. 5 • WinZip 8. 0 • Scanner (for scanning of paper documents to be filed as attachments to e-Form) • Printer (for printing bank payment challan or service fee bill) Thus, you have a Virtual Front Office in your home/office with the above mentioned facilities. You can even use a cyber cafe or kiosk equipped with above facilities as a Virtual Front Office. 3. Physical Front Office (PFO) Physical Front Office replaces the existing RoC office counters.

It is meant to serve as a facilitation centre to facilitate filing of e-Forms, scanning attachments to e-Forms, generating challans for making payment of fees at the designated bank and finally, uploading the filled in digitally signed e-Forms. The Physical Front Offices will be designed to facilitate electronic delivery of services, similar to the type available at the Virtual Front Office, and will serve corporate who do not have access to computers and Internet. As part of MCA21, adequate number of Physical Front Offices, including Temporary Front Offices (TFOs), to cater to peak seasonal load, will be established throughout the country to serve better the interests of corporate and professionals. The details of likely Physical Front Offices are given in Appendix A. The finalized address of Physical Front Office in your city can be referred from My MCA portal.

While encouraging customers to use Virtual Front Office for fulfilling their obligations as stipulated under the Companies Act 1956, Physical Front Offices would ensure a smooth transition to fully electronic delivery of MCA services. Members of the business community can walk into these offices and obtain services. All the services for scanning and uploading of e-Forms at PFOs would be available free of cost in the Physical Front Offices. Since these facilitation centers are being set up to facilitate e-Filing during the transition period, these will remain operational for a period of three years only, by which time, it is expected that all clients will operate through Virtual Front Offices. Back Office

The Back Office represents the office of RoCs, Regional Directors, and Headquarters and takes care of internal processing of the forms filed by the corporate user as per MCA norms and guidelines. The e-Forms will be routed dynamically to the concerned authority for processing depending upon the assigned role. All the e-Forms along with the attachments will be stored in the electronic repository, which the staff of MCA can view depending upon the access rights. Contribution of Information Technology in Banking Sector IT in the Indian Financial Sector – the Beginnings 1. The use of technology in expanding banking has been a key focus area of the Reserve Bank.

Technological innovation not only enables a broader reach for consumer banking and financial services, but also enhances its capacity for continued and inclusive growth. 2. There are several factors attributed to India’s high growth in the recent period – improved productivity, growing entrepreneurial spirit, and higher savings, to name the most important. But one factor usually goes unacknowledged – that is financial intermediation. Improvement in the quantum and quality of financial intermediation ranks along with other factors that are mentioned above is a key growth driver. And one of the factors that drove the improvement in the quantum and quality of financial intermediation is more wide spread and more efficient use of IT. 3.

Implementing IT in an Indian banking system dominated by government-owned banks has not been easy. In his book ‘Imagining India – Ideas for the New Century’, Nandan Nilekani makes interesting references to this issue. He writes about his travels around the country in the early 1990s, speaking about the role of, what was then called in typical Indian English as ‘electronification’ in Indian banking. After one such presentation, Nandan writes, the chairman of a bank advised him to stop preaching, warning him that (quote), ‘The unions will gherao you in your house! ’ Nandan goes on to describe another presentation before an incredibly hostile audience, who dismissed out of hand all his ideas and suggestions.

But at the end of the presentation, the union leader told him privately that both his sons were working for Microsoft on software solutions. Initial days of IT implementation at the Reserve Bank, systems had to be smuggled into the office when ‘the world was sleeping’. IT implementation no longer faces opposition from any quarter. Indeed, everyone welcomes it. Even the trade unions have become extensive users of technology. IT in the Indian Financial Sector – Status Today 1. More than most other industries, banks and financial institutions rely on gathering, processing, analyzing and providing information in order to meet the needs of customers.

Given the importance of information in banking, it is not surprising that banks were among the earliest adopters of automated information processing technology. The visible benefits of IT in day-to-day banking in India are quite well known. There’s ‘Anywhere Banking’ through Core Banking Systems, ‘Anytime Banking’ through new, 24*7*365 delivery channels such as Automated Teller Machines (ATMs), and Net and Mobile Banking. In addition, IT has enabled the efficient, accurate and timely management of the increased transaction volume that comes with a larger customer base. It has also facilitated the movement from class banking to mass banking. 2.

The past few years saw RBI marking some major milestones in the Indian payment and settlement systems. The introduction of the Real Time Gross Settlement (RTGS) System has resulted in compliance with the Basle Core Principles for Systemically Important Payment Systems of the Bank for International Settlements. It also has paved the way for risk-free, credit push based fund transfers settled on a real-time basis and in central bank money. The facility for inter-bank funds settlement through RTGS is today available across more than 55,000 bank branches, in more than 2500 regional centers across the country – a coverage span perhaps not seen anywhere else in the world.

Now, let’s compare today’s situation with what was in place in 2004, when only 4,800 branches offered RTGS. The rapid acceptance of RTGS by users can be measured by the daily transaction volume: today, close to 100,000 transactions a day in the RTGS mode, up from just about 6000 transactions a day in 2004-05. 3. In fact, quick, safe and efficient electronic movement of funds from virtually any part of the country to any other location is now almost guaranteed. This is enabled by the coordination with the National Electronic Funds transfer (NEFT) System and the National Electronic Clearing Service (NECS). In 2005, RBI was clearing about 2. 70 lakh NEFT transactions a month. This number has jumped exponentially to nearly 40 lakh a month today.

The establishment of the legal framework for all of this – in the form of the Payment and Settlement Systems Act, 2007 – provides the requisite supportive structure for these systems. 4. The extent of customer migration to electronic payments in India. From less than half a percent of transactions in the electronic mode in 2001, today we process close to about 30 crore transactions per year in the electronic mode. The same holds true for RBI’s recent initiative away from High Value Clearing to electronic modes – a move aimed at creating a safer, secure and credit-push based funds transfer route that has gained considerable traction. 5. There are developments seen in the communication network and messaging system in India.

This Institute for Development and Research in Banking Technology (IDRBT), set up by the RBI in 1997, implemented the INdianFInancialNETwork – the INFINET – a ‘one-of-a-kind’ initiative for the banking sector aimed at sharing expensive IT resources so as to achieve economies of scale. One of IDRBT’s notable achievements has been the implementation of Public Key Infrastructure (PKI) – based electronic data transfer with very high security levels. The Institute also developed a messaging standard called Structured Financial Messaging System (SFMS) with security features superior even to SWIFT. Today INFINET has migrated to the latest MPLS technology in an effort to provide a state-of-the-art network. 6.

IDRBT also set up the National Financial Switch for interconnecting ATMs. It’s interesting to note that at the turn of the century, there were only about 4000 ATMs in all of India, and today there are more than ten times this number, and all of them interconnected. These changes have enabled RBI to take major step in this area. Like, ATM card holders can use any ATM in the country irrespective of which bank issued them the card. 7. Given the growing importance of IT in the banking sector, it is appropriate that the IDRBT provides incentives to the IT-based operations of commercial banks by evaluating their IT capabilities and motivating them to push for improvements by instituting awards.

IT in the Financial Sector: the Continuing Agenda 1. Information technologies and the innovations they enable are strategic tools for enhancing the value of customer relationship. They reduce the costs of financial transactions, improve the allocation of financial resources, and increase the competitiveness and efficiency of financial institutions. 2. Even as the achievements of IT in the banking sector are impressive, RBI has a big agenda on the way forward. Current financial sector leaders still need to take greater advantage of new technologies and information-based systems and expand the coverage of the Indian banking and financial system.

For instance, the potential of IT in extending banking services to under-served markets in rural and semi-urban areas is enormous. The use of Smart Card technology, mobile ATMs, coverage of post offices under electronic payments networks in out-of-reach areas – all could play significant roles in providing financial services to more people and thereby serve financial inclusion. 3. There is tremendous potential for the business growth of financial institutions on the one hand and the inclusive growth of India on the other. We have already seen banks using innovative approaches such as solar power- and mobile technology-based connectivity for branches. A variety of options are available which enable extended reach of such services.

The banks should identify the technological model that is right for them. We have already seen the positive benefits that come from extending the reach of banking services through pilot projects in Andhra Pradesh and parts of the North East. The Reserve Bank also has announced its intention to expand the reach of banking in the North East even further by funding the cost of connectivity using VSAT technology. IBA is working on the details of this effort. 4. India is experiencing an explosion in the use of mobile communication technology. And this is a development that the financial sector can exploit. Mobile phone users belong to all strata of society, spread across metropolitan centers, towns and villages.

Banks can take advantage of this expanded reach of telecom if they provide services through this medium. The phone’s integrated chip can function as a multi-application smart card, thus making banking services available to virtually every mobile phone owner. This holds substantial promise as the delivery vehicle of the future: there is huge potential and an exciting opportunity. However, the expansion of such capabilities must be accompanied by a minimum level of essential security features and continued compliance with established covenants relating to privacy of customer transactions. 5. The potential of IT for the near future also includes: • Enabling differentiation in customer service; Facilitating Customer Relationship Management (CRM) based on available information, which can be stored and retrieved from data warehouses; • Improving asset-liability management for banks, which has a direct bearing on the profits of banks; • Enhancing complian