Indian Bank Falls Victim to International Hackers Who Transferred $2 Million

Three fraudulent transactions were initiated by cyber criminals who gained access into the City Union Bank's system illegally.


A cyberattack took place on the City Union Bank’s Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, revealing a conspiracy involving various countries, the bank said on Feb.18.

The City Union Bank clarified that the modus operandi of this incident is not related to the multibillion dollar fraud allegedly committed by diamond merchant Nirav Modi against the Punjab National Bank. “The incident that happened in our bank is because of the cyber-attack initiated by the international cyber criminals and there is no evidence of internal staff involvement,” the City Union Bank said in a statement.

It was discovered during the bank’s reconciliation process on Feb.7 that three fraudulent transactions were initiated by cyber criminals who gained access into the bank’s system illegally. The bank immediately alerted the correspondent banks to recall the funds. .

“Of the three fraudulent remittances, one remittance was made through Standard Chartered Bank, New York to a Dubai based bank for $500,000 was blocked immediately and returned back to us,” the statement said. The second remittance was made through Standard Chartered Bank, Frankfurt, to a Turkey-based bank for Euro 300,000. The fund was blocked in the beneficiary’s account in the Turkish bank.

According to the bank, the third remittance was made through Bank of America in New York and went to a China-based bank for $1 million. The beneficiary had claimed the funds by submitting forged documentary evidences.

N. Kamakodi, the Chief Executive Officer, said that it is a conspiracy that involved various countries. “This is basically a cyberattack by international cyber criminals,” he said, Reuters reported on Feb.19.

Kamakodi added that the money has been retrieved or blocked in two out of the three cases, according to reports by CNBC-TV18. The beneficiary in the third case was identified as Zhejiang Rural Credit Cooperative Union in Hangzhou, China.

Brussels-based SWIFT, a global provider of secure financial messaging services, has been pushing banks to strengthen the security of computers that are used to transfer money. It has been urging banks to do so since February 2016 when Bangladesh Bank lost $81 million in a cyber theft targeting central bank computers that transferred money. According to experts on banking security, Indian banks that depend on the messaging platform SWIFT are required to be more cautious, reported Reuters.

The City Union Bank said that it was taking the help of the Ministry of External Affairs via the Consulate General of Shanghai and Istanbul and office of the National Cyber Security Council (PMO). “We are taking all necessary legal and diplomatic actions with the help of Indian Consulate in Istanbul, Turkey to repatriate the amount,” the statement said.

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