Union Bank’s $171 million Wire Fraud – A Wake Up Call 

The Union Bank of India had reported a case of cyber attack on one of its nostro accounts last year on the 21st of July. At that point , the amount remained undisclosed and the breach was said to have happened from an email attachment opened  by one of its employees.It was a phishing attack. An email with the handle @rbi.org.in had an attachment -a zip file with a .xer file.While one employee fell pray, some were smart to report it as suspicious. However, it was too late.The malware had entered the bank.

A sum of $171 million had been debited from its nostro account with Citibank  New York .Since Swift recon happens only the next day once the nostro statement comes in , the bank’s treasury department realised only the next day.

The money by then had been moved to accounts in two banks in Cambodia—the Canadia Bank Plc and RHB IndoChina Bank Ltd, besides the Siam Commercial Bank in Thailand, Bank Sinopac in Taiwan, and a bank in Australia. These funds were routed by Citibank New York and JP Morgan Chase New York, which hold UBI’s foreign exchange accounts.

Source Hindu : UBI Cyber Attack

SWIFT maintains a neutral stand in the investigation primarily initiated by UBI and insists no breach at its end.However , it is high time that SWIFT looks at its loopholes -recon delays , lack of built in fraud early warning mechanism and an AI powered neural network enabled clustering system that can track such suspicious activity. 

With blockchain heralding a new age of cryptographic security and unit level transparency the bank’s must also look for alternatives to the wire transfer monopoly and it’s inherent loopholes.

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RBI says all payment systems to remain closed on 1 April 2017

The Reserve Bank of India (RBI) has said all payment systems will remain closed on 1 April. It is a change from its earlier directive asking banks to remain open on the first day of the next fiscal beginning 1 April.

However, there is no change with regard to the payment channels, including RTGS and NEFT, being operative on a normal working day during 25 March to 1 April (including Saturday, Sunday and all holidays).

“On reconsideration, it has been decided that all payment systems will remain closed on 1 April, 2017,” it said.

The RBI said it will issue a separate broadcast message in this regard through respective system to member banks. It also clarified that the special clearing operation on 30 and 31 March remains unchanged. On 23 March, the RBI had instructed banks about conducting special clearing exclusively for government transactions on 30-31 March.

1 April is an annual closing day of accounts for banks and they remain shut.

Source : MINT