Bankers said that there was no problem in the IMPS system, and that the issues were likely caused by human error.There was speculation that this could be a cyber issue, although the bank did not comment. “The bank, as a precautionary measure, has made the IMPS channel offline and is working closely with stakeholders to resolve the issue and restore the IMPS services at the earliest. The matter has been reported to law enforcement agencies for necessary action,” UCO Bank said.
IMPS is a real-time interbank electronic funds transfer system that happens straight without intervention. The account-to-account fund transfer platform is the backbone of UPI. There is a daily transaction limit of Rs 5 lakh under IMPS and transfers are subject to charges between Rs 5 and Rs 15.
In addition to IMPS, banks also offer National Electronic Fund Transfer (NEFT) for account-to-account transfers, although the transfer does not happen instantly. Bank executives could not be reached to ascertain whether NEFT would continue to be available.
In a second filing with exchanges, the bank said there was no issue with the IMPS platform and that the transactions observed by the bank were due to an “internal technical issue as a result of which bank customers received some erroneous credits via IMPS”.
A bank technology expert said that the error could have occurred either due to changes that have been made to the system, resulting in false validation of transactions. The other possibility is a cyber incident resulting in these false validations.
The state-run player did not comment on when the services are likely to be restored. “The financial impact is yet to be ascertained, and the bank will endeavour to intimate the same on ascertainment,” it said.
In 2018, hackers breached Pune-based Cosmos Bank’s servers and created a proxy switch that fraudulently approved payment messages. As a result, when money was sought to be withdrawn from ATMs through cloned cards, the proxy approved the transactions.