LI Network
Published on: November 20, 2023 at 10:10 IST
In response to the recent UCO Bank incident, the Finance Ministry has directed state-owned banks to conduct a thorough review of their digital operations’ systems and processes.
Sources indicate that the banks have been specifically instructed to assess the robustness of their cybersecurity measures and implement necessary steps to enhance their security protocols.
Emphasizing the need for a vigilant approach, sources have highlighted the importance of preparedness to counter potential future cyber threats.
The Finance Ministry, in collaboration with the Reserve Bank of India (RBI), has consistently been raising awareness among banks regarding cybersecurity, considering the escalating digitization trends in the financial sector.
The recent episode involving Kolkata-based UCO Bank revealed an erroneous credit of Rs 820 crore to the accounts of the bank’s holders through the Immediate Payment Service (IMPS) between November 10-13.
The bank attributed this discrepancy to technical issues in the IMPS system, where transactions from account holders of other banks resulted in crediting UCO Bank accounts without actual funds being received.
IMPS, known for its real-time interbank electronic funds transfer capabilities, operates without any intervention. UCO Bank promptly took action by blocking the recipients’ accounts and successfully recovering Rs 649 crore, approximately 79% of the credited amount.
While the state-owned bank has yet to clarify whether the technical glitch stemmed from human error or a hacking attempt, it has reported the incident to law enforcement agencies for further investigation and necessary action.
This directive from the Finance Ministry underscores the critical need for banks to fortify their cybersecurity measures to safeguard against potential vulnerabilities in the digital landscape.