Finance ministry asks PSU banks to take measures to bolster cybersecurity

The Finance Ministry has asked state-owned banks to review systems and processes related to their digital operation in view of the recent UCO Bank incident.

According to sources, the banks have been advised to check their cybersecurity robustness and take measures to strengthen them.

Banks should keep a tight vigil, and there should be readiness for future cyber threats, sources said.

The Finance Ministry and RBI have been sensitising banks on this aspect at regular intervals amid the growing digitisation in the financial sector.

Last week, Kolkata-based public sector lender UCO Bank reported erroneous credit of Rs 820 crore to account holders of the bank via Immediate Payment Service (IMPS).

During November 10-13, the bank had observed, due to technical issues in IMPS, certain transaction(s) initiated by holders of other banks have resulted in credit to the account holders in UCO Bank without actual receipt of money from these banks.

IMPS is a real-time interbank electronic funds transfer system without any intervention.

The bank blocked the recipients' accounts and has been able to recover Rs 649 crore out of Rs 820 crore, which is about 79 per cent of the amount.

The state-owned bank is yet to clarify whether this technical glitch was due to human error or a hacking attempt.

However, the bank has reported the matter to the law enforcement agencies for necessary action.