UCO Bank erroneously credits Rs. 820 crore to account holders via IMPS; recovers Rs. 649 crore, warns of possible cyber attack

The finance ministry has urged public sector banks to streamline their digital operations by leveraging cybersecurity measures. The directive has come in view of the recent UCO Bank incident. The finance ministry advised banks to be vigilant against possible cyber threats.

As banks have digitalized rapidly, they are prone to cyber attacks. The Reserve Bank of India (RBI) has been making banks responsible for their cybersecurity. Last week, Kolkata-based public sector lender UCO Bank erroneously credited Rs. 820 crore to account holders of the bank via Immediate Payment Service (IMPS).

Later scrutiny revealed that the erroneous credit was caused due to a technical glitch in IMPS as certain transactions made by other bank holders erroneously credited to UCO Bank account without actual receipt of the money from these banks.

Later, the bank blocked the recipients’ accounts and recovered Rs. 649 crore, i.e., 79% of the total amount credited by mistake. However, it has not been revealed whether the erroneous transaction caused by technical glitch was due to human error or a hacking attempt.

IMPS is a real-time interbank electronic fund transfer system.