Hackers attack Indian Bank, manage to transfer out $2 million

Hackers attack Indian Bank, manage to transfer out $2 million

The City Union Bank said that it had been able to block one of the remittances of US$500,000 being sent to a Dubai-based lender through a Standard Chartered Bank account.

In the wake of the Rs 11,300 crore fraud at the Punjab National Bank, the Reserve Bank of India has constituted a five member panel under former board member Y H Malegam to look into the wide divergence by banks in asset classification and provisioning and reasons for frauds and measures to prevent it and also asked them to strengthen the SWIFT operating environment. "The incident that happened in our bank is because of the cyber-attack initiated by the worldwide cyber criminals and there is no evidence of internal staff involvement", the City Union Bank said in a statement.

"During our reconciliation process on February 7, it was found out that 3 fraudulent remittances had gone through our SWIFT system to our corespondent banks which were not initiated from our bank's end". The bank immediately alerted the correspondent banks to recall the funds.

The first fraudulent transaction detected by City Union Bank consisted of Dollars 500,000 bound for a Dubai-based bank. Officials blocked a sum of Euro 300,000 after it ended up in a Turkey-based bank account. Another, for EUR300,000 made through Standard Chartered Bank, Frankfurt to a Turkey-based bank has been blocked in the beneficiary's account.

Kamakodi called it a "conspiracy" involving multiple countries, and added the lender was still investigating how it had happened. "This is basically a cyberattack by global cyber criminals", he said, Reuters reported on Feb.19.

However, a third transfer of $1m sent via a Bank of America account in NY to Zhejiang Rural Credit Cooperative Union in Hangzhou, China, appears to have succeeded. The Bank says it was "blocked immediately", perhaps by a scanning service which SWIFT launched in March 2016 as part of its new Customer Security Program (CSP) following the $81 million heist at the Bangladesh Bank. According to experts on banking security, Indian banks that depend on the messaging platform SWIFT are required to be more cautious, reported Reuters.

News of the Union Bank heist comes just days after reports that a Russian bank a year ago lost $6 million to cybercrooks in an attack that took advantage of internal security weaknesses in the bank's gateway to Swift. "We are taking all necessary legal and diplomatic actions with the help of Indian Consulate in Istanbul, Turkey to repatriate the amount", the statement said.

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