In the fast-paced world of digital transactions, a recent hiccup at UCO Bank in India caught the attention of many when approximately 8.2 billion rupees (SGD$132 million) found their way into customers’ accounts due to a technical glitch, according to The Hindu Business Line.
In mid-November, UCO Bank faced an unforeseen challenge when an internal technical issue caused an accidental credit of 8.2 billion rupees (S$132 million) into various customer accounts. This incident, although alarming, prompted swift action from the bank.
The glitch, originating from UCO’s Immediate Payment Service (IMPS), led to erroneous credits for some customers.
IMPS, akin to Singapore’s PayNow system, facilitates immediate electronic fund transfers through mobile or internet banking. The error, occurring between November 10 and 13, resulted in transactions from other banks reaching UCO Bank accounts.
Upon discovering the error, UCO Bank promptly froze the impacted accounts as a precautionary measure. Simultaneously, IMPS was temporarily disabled to address and rectify the technical issue causing the unexpected credits.
Only recovered about $104 million
Efforts to recover the funds were initiated promptly. As of the latest update, UCO Bank has successfully reclaimed about 6.49 billion rupees (S$104 million), representing approximately 79% of the erroneously transferred amount.
Curiously, despite the erroneous credits, UCO account holders did not actually receive any money. The bank clarified that the issue solely pertained to the IMPS platform, and immediate actions were taken to address it, ensuring minimal impact on customers.
The incident unfolded over a brief period, from November 10 to 13. During this time, transactions from account holders of other banks inadvertently ended up in UCO Bank accounts, setting off the alarms that led to the swift response from the bank.
Recognizing the severity of the incident, India’s government issued a directive to state-owned banks, instructing them to enhance digital security measures. This move underscores the broader importance of cybersecurity in the banking sector and the need for proactive measures to prevent such incidents.