Page 38 - Banking Finance May 2021

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interest first and principal thereafter, imbalances are bound wholehearted involvement in the development activities of
to persist. A tolerance limit may be fixed for the purpose their own organization. There is a need to make all out
and draw conclusions accordingly. efforts to address these problems by creating a common
fund as in the past. They should be assured of their rightful
Lending activities emoluments and other benefits. If employees of any
organization do not love their own organization, who else
Societies, which are not complying with a revised viability
norm (by linking to net profits made each year, net NPA will love?
ratio, minimum level of CRAR, return on assets, etc.) should
be closely monitored. Viable societies may be encouraged Conclusion

towards non-credit activities, such as consumer stores, Traditional bank model is disappearing. Technology, social
procurement activities, hiring farm inputs, transport and business digital communities are taking customers and
facilities to farmers, establishment of seed processing units, potential customers out of banks' networks. They are also
establishment of petrol bunks, etc. Necessary financial yielding to the customer's expectations about
assistance may be provided by DCCBs and NABARD may personalization and convenience. If this is the scenario in
contemplate to provide refinance to such activities from the entire banking industry, only 'non-credit activities' with
their CDF. service motto coupled with business principles is only the
panacea to the PACS. Still, there is potential for those
Training activities in rural areas. Many societies proved it. Apex level
institutions may also reorient their refinance arrangements
Though many training programs are being conducted by CTIs
at present with requisite financial support from NABARD, it for such activities in a big way by amending their act
is noticed that attendance / participation in such programs is provisions, if need be.
not upto the mark. The very modes of training arrangements
need to be changed. More practical / field level exposures / Lastly, as quoted by Hon'ble Franklin D. Roosevelt -
case studies should replace the present age-old teacher-
"Competition has been shown to be useful upto a
taught mode. C-PEC, BIRD may look into this aspect and bring
certain point and no further, but cooperation,
about the much-needed change in imparting necessary inputs
for capacity building in the Societies. which is the thing we must strive for today, begins
where competition leaves off".
Low morale

Morale of the staff of PACS is very low. A feeling of Source:
uncertainty in their minds is a mental block for their NAFSCOB's quarterly magazine July - Sep 2020.

New trick by fraudsters to withdraw money from ATMs

In view of increasing incidents of Man in the Middle (MiTM) attacks on ATMs, all banks have been directed to enhance
their safety norms for ATMs through end-to-end encryption in the network. In a recent communication to all banks, the
Central Government has said that the MiTM attacks have been increasing under which messages sent by 'ATM Switch'
to 'ATM Host' are altered by attackers to withdraw cash fraudulently. Investigations by security agencies have found
that cyber fraud gangs have started adopting a new modus operandi to withdraw money from ATMs. According to the
investigators, the fraudsters first tamper with the network (LAN) cable of the ATM. Declined messages from 'ATM Switch'
are altered to successful cash withdrawal transaction responses, and subsequently cash is withdrawn from the ATM.
The attacker first inserts a device between the ATM machine and the router or switch in the ATM premises. This
device has the capability to modify the responses back from authorisation host (ATM Switch) which is connected to
ATM through network. The attacker then uses restricted cards (or blocked cards) to submit a withdrawal request.
When the 'ATM Switch' sends a declined message, the attacker in the middle alters the response to approve the
transaction and subsequently withdraws cash. In view of this modus operandi, the banks have been asked to ensure
end-to-end encryption in the communication between the 'ATM Terminal' or PC and the 'ATM Switch'.

38 | 2021 | MAY | BANKING FINANCE