Finance Ministry asks public sector banks to examine and enhance cybersecurity

-, Nov 20, 2023, India Blooms News Service15

New Delhi: The Finance Ministry has asked state-owned banks to reassess their digital operations in light of the recent UCO Bank incident, media reports said.

It has been advised that banks maintain a vigilant stance and be prepared for potential cyber threats in the future.

The Finance Ministry and RBI have consistently stressed the importance of cybersecurity to banks, given the increasing digitisation in the financial sector.

Last week, UCO Bank, a public sector lender based in Kolkata, revealed an erroneous crediting of Rs 820 crore to the accounts of its customers through the Immediate Payment Service (IMPS).

Between November 10 and 13, the bank found technical glitches in the IMPS system, leading to the inadvertent transactions by account holders from other banks resulting in the crediting of funds to UCO Bank account holders without the corresponding actual receipt of money from these external banks.

IMPS is an instant interbank electronic funds transfer system that operates without any manual intervention.

In order to control the situation, UCO Bank blocked the accounts of the recipients and managed to recover Rs 649 crore out of the total of Rs 820 crore, comprising around 79% of the erroneously credited amount.

The bank has not clarified whether the error occurred due to a technical glitch stemming from human error or a potential hacking attempt. However, it has reported the incident to law enforcement agencies to initiate the necessary actions and investigations.