Page 21 - Banking Finance September 2018

CO-OPERATIVE BANK NEWS

CO-OPERATIVE BANK

NEWS
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NEWS

RBI cancels the licence of Cosmos Co-operative Bank loses Rs.94 crore to cyber

Bhilwara Mahila Urban frauds
Co-operative Bank Cosmos Cooperative Bank has reported fraudulent withdrawals amounting to a
staggering Rs.94 crore due to cyber attacks, includ-
The RBI has cancelled the licence of ing malware attacks, on its debit card payment sys-
Rajasthan-based Bhilwara Mahila Ur- tem and SWIFT transactions.
ban Co-operative Bank as it does not
The bank said that about Rs.78 crore was withdrawn
have adequate capital and earning
prospects. The RBI said it has can- through ATMs located across 28 countries. This in-
cludes 12,000 Visa card transactions. In the same way, about Rs.2.5 crore was
celled the licence of the bank with withdrawn via 2,800 debit card transactions in India.
effect from the close of business on
August 31, 2018. "The bank does not Further, Rs.13.9 crore was transferred to Hong Kong via three SWIFT (Society
have adequate capital and earning for Worldwide Interbank Financial Telecommunication) transactions. SWIFT is a
prospects. The bank is not in a posi- co-operative organisation that operates a network for the exchange of payment
tion to pay its present and future and other financial messages between financial institutions.
depositors in full as and when their The bank learnt about the malware attack on its debit card payment system on
claims accrue," the apex bank said. August 11. It observed unusual, repeated transactions taking place through ATM
Visa and RuPay cards for two hours. "As soon as the suspicious transactions were
The affairs of the bank are being
reported, the bank shut down its Visa and RuPay debit card payment system. The
conducted in a manner detrimental
core banking system (CBS) of the bank receives debit card payment requests via
to the interest of its present and fu-
ture depositors and no useful pur- the switching system," a bank statement said. It added that during the malware
attack, a proxy switch was created that approved all the fraudulent payments.
pose would be served by allowing the
bank to continue as envisaged in the None of the transactions were debited to customers' accounts, said the bank,
Banking Regulation Act, it said fur- adding that savings and recurring accounts as well as term deposits are safe.
ther. "Consequent to the cancellation The bank's Chairman Milind Anant Kale said customer accounts are safe, but
of its licence, Bhilwara Mahila Urban declined to disclose the names of the vendors of the security systems. The bank
Co-operative Bank Ltd, Bhilwara, has appointed a forensic agency that will submit a report in a few days on the
Rajasthan is prohibited from con- modus operandi of the attack.
ducting the business of banking
which includes acceptance of depos-
its and repayment of deposits…with
immediate effect," the RBI said.

BANKING FINANCE | SEPTEMBER | 2018 | 21