Govt. to hold discussion with RBI, Trai, NPCI after the UCO Bank incident

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The Finance Ministry and the parliamentary panel on ICT have started investigations after the recent issue at UCO Bank  and a rise in daily fraud cases. The Financial services secretary Vivek Joshi will have a discussion with the Reserve Bank of India (RBI), Trai, the telecom department and the National Payments Corporation of India (NPCI) next week.

 

Simultaneously, the standing committee has already engaged in discussions with the finance ministry and the Managing Director of Punjab National Bank (PNB).   

    

Reported fraud cases reached nearly 13,500 in the last year, compared to 9,100 in the previous fiscal year, marking an increase of almost 50%. As per the analysts, these figures do not reflect the situation completely as many consumers do not file complaints.

 

The Department of Financial Services has enlisted the Indian Cyber Crime Coordination Centre (I4C), an agency under the home ministry, to provide insights from the National Cybercrime Reporting Portal's four-year data and address existing challenges. Despite ongoing efforts by banks to educate consumers on data security, instances persist where account holders unknowingly share passwords or screens with fraudsters. Recognising the limitations faced by banks in protecting consumers, the regulator and government are exploring various measures to halt the outflow of funds even after they have been transferred between accounts.

 

The UCO Bank incident caused the immediate meeting.

 

The government and the Reserve Bank of India (RBI) are investigating lapses at UCO Bank. Earlier this month, 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). According to the bank, during November 10-13 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.

Source