State-owned UCO Bank has faced a financial conundrum after a technical glitch led to the erroneous crediting of funds, amounting to Rs 820 crore, to numerous customer accounts. Despite their efforts, the bank has only managed to recover 79% of the total amount and has now turned to the Central Bureau of Investigation (CBI) for assistance, as reported by a high-ranking official speaking to Moneycontrol.
The glitch, identified within the Immediate Payment Service (IMPS) on November 15, resulted in valid transactions being rejected while simultaneously crediting the amount to both the sender and recipient. Consequently, UCO Bank’s regulatory filing on November 16 disclosed that Rs 649 crore (79% of the total) has been reclaimed, leaving a balance of Rs 171 crore yet to be recovered.
Ashwani Kumar, UCO Bank’s Managing Director and CEO, mentioned seeking aid from the Reserve Bank of India (RBI) and collaborating with other banks to resolve the issue. However, the bank’s efforts are not solely directed towards recovering funds; they are also striving to rectify the technical glitch alongside internal experts and the RBI’s support.
The bank’s swift response involved freezing the recipients’ accounts and initiating recovery measures following the discovery of the discrepancies from November 10 to 13. Despite the festive period, UCO Bank’s teams worked diligently to rectify the issue and recover misplaced funds.
This unfortunate incident adds to a series of digital banking mishaps in recent times. Earlier incidents include Tamilnad Mercantile Bank erroneously transferring Rs 9,000 crore to a cab driver’s account and Kotak Mahindra Bank’s glitch that displayed an incorrect account balance through SMS alerts, although the actual account balance remained unaffected.
UCO Bank’s recourse to the CBI signifies the gravity of the situation and their determination to rectify the errors in the digital banking domain, emphasizing the crucial need for robust cybersecurity measures in the digital age.
Sources By Agencies