New Delhi: The Ministry of Finance has asked state-owned banks to review systems and processes related to their digital operations in light of the recent UCO Bank incident.
According to sources, the banks are advised to check their cyber security strength and take steps to strengthen them. Banks should keep a tight watch, and should be prepared for future cyber threats, sources said.
The Ministry of Finance and the RBI are sensitizing the banks on this aspect on a regular basis amid the increase in digitization in the financial sector.
Last week, Kolkata-based public sector lender UCO Bank reported an erroneous credit of Rs 820 crore to the bank’s account holders through the Immediate Payment Service (IMPS).
During November 10-13, the bank noticed that due to technical issues in IMPS, certain transactions initiated by other bank holders had given credit to account holders in UCO Bank without receiving money from the banks that.
IMPS is a real-time interbank electronic funds transfer system with no intervention.
The bank froze the accounts of the beneficiaries and was able to recover Rs 649 crore out of Rs 820 crore, which is about 79 per cent of the amount.
The state-owned bank is yet to clarify whether this technical glitch was caused by human error or a hacking attempt.
However, the bank has reported the matter to the law enforcement agencies for necessary action.
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