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Adding user and security?



What is the best way to add user in Linux with a seperate user home
directory?

I installed Redhat 5.2 from PCQ and tried adding a user with..

adduser xyz

a directory is created automatically say /home/xyz
but where are the homepages for this user?
If the user opens a FTP session, what he gets is the comtent of /home/xyz
and still he can see the contents of /etc and all other directories.
How can I restrict him to only his directory? Atleast he should not have
access to the system files.
I saw somewhere in the docs about security but was not able to capture the
same properly.

Any suggestion are appreciated.

Thanks
Regards
Prasad




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