Configuring OpenSSH

Edit the file /etc/ssh/sshd_config and change the line that starts with

 Subsystem sftp /.....

to

 Subsystem sftp sftp-internal /.....

and add following block at the end of this file:

 Match group filetransfer
   ChrootDirectory %h
   X11Forwarding no
   AllowTcpForwarding no
   ForceCommand internal-sftp

Finally restart OpenSSH

 /etc/init.d/ssh restart

Create the sftp only group

 addgroup filetransfer

Create a user and jail it into that group (no SSH login allowed for them)

 adduser username
 usermod -G filetransfer username
 chown root:root /home/username
 chmod 755 /home/username

Create an upload dir

 mkdir /home/username/upload
 chown username:username /home/username/upload