ICICI, SBI Witnessed Most Frauds In 2016; Bank Of Maharashtra Detects Rs 6 Cr UPI Fraud, Files FIR Against 50!


State Bank of India SBI

As per latest Reserve Bank of India (RBI) data, ICICI Bank and SBI has emerged as the banks which witnessed most number of frauds between April-December 2016 period.

Incidentally, ICICI Bank is the largest private sector bank, while SBI is the largest public sector bank in India.

And, the worst thing is that several bank employees were also found to be conspirators in these frauds. While 64 employees of SBI were caught siphoning off money illegally, in HDFC Bank, 49 employees were found and in Axis Bank, 35 employees were found.

If we talk about frauds amounting to Rs 1 lakh and more, then 455 such cases were found in ICICI Bank, while 429 cases were discovered in SBI. Other prominent banks in this list include: Standard Chartered bank, whereas 244 cases were found and HDFC Bank with 237 cases.

And if we talk about the value of frauds, then maximum Rs 2236.81 crore fraud was found in SBI Bank, followed by Rs 2250.34 crore in Punjab National Bank and Rs 1998.49 crore in Axis Bank.

Overall, total of 450 bank employees were discovered in frauds totalling Rs 17,750.27 crore, involving 3870 cases (for the period April-December, 2016)

These numbers are based on the report provided by RBI to Finance Ministry.

UPI Fraud Detected in Bank of Maharashtra

Meanwhile, in one of the instance, UPI (Unified Payment Interface) fraud tuning to Rs 6.14 crore was detected in Bank of Maharashtra branch in Pune.

Using a loophole in the bank’s UPI app (which was created by Mumbai-based InfraSoft Technologies), some people withdrew money from other bank accounts using Real Time Gross Settlement (RTGS) platform. Some of these people had bank accounts in that particular branch of Bank of Maharashtra, and as per reports, knew the victim’s bank account details.

Using fake SIM cards, these 50 people (who are unrelated) created various UPI accounts, and started sending ‘receive (transfer) money’ requests to various account holders, in batches of Rs 1 lakh, starting from December 1st, 2016.

Once the request was accepted by the BoM customer, the money was instantly transferred.

As a result, BoM accounts were debited with Rs 1 lakh, for 672 times within 48 days. And it happened due to a bug in the app, wherein the algorithm failed to correctly evaluate the request, and initiated the transaction even if there was no balance.

M C Kulkarni, general manager – information technology, Bank of Maharashtra said,

“We are trying to establish how this all started. The primary hitch was at Infrasoft’s end. When we said “insufficient funds,” the app should not have sent a “success” message to NPCI. The transaction should not have gone through,”

The issue has now been resolved in the UPI app, and FIR has been lodged against those 50 people who carried over these fraud transactions.

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