Alarmed by a recent surge in bank fraud cases and a major incident at UCO Bank, India’s Finance Ministry and the Parliamentary Panel on ICT have joined forces to investigate and address the issue.
Next week, Financial Services Secretary Vivek Joshi will spearhead crucial consultations with officials from the Reserve Bank of India (RBI), Trai, the Telecom Department, and the National Payments Corporation of India (NPCI).
The Parliamentary Panel has already engaged in discussions with the Finance Ministry and Punjab National Bank (PNB) MD. The steep rise in reported fraud cases, from 9,100 in the previous fiscal year to nearly 13,500 in the last year, has heightened concerns.
Analysts believe these figures may underestimate the true extent of the problem, as many consumers refrain from filing complaints.
The UCO Bank incident appears to have been the catalyst for this decisive action. The government and RBI are currently scrutinizing UCO Bank’s internal procedures following an incident earlier this month. The Kolkata-based public sector lender mistakenly credited account holders with a staggering Rs 820 crore through the Immediate Payment Service (IMPS).
According to UCO Bank, technical glitches in IMPS during November 10-13 allowed unauthorized transactions from other banks to credit UCO Bank account holders without actual fund transfers. IMPS is a real-time interbank electronic funds transfer system that operates autonomously.
UCO Bank has blocked the recipients’ accounts and recovered Rs 649 crore of the erroneous credits. The state-owned bank has yet to determine whether the technical glitch was caused by human error or a hacking attempt. However, they have informed law enforcement agencies for further investigation.
