City Union Bank CEO blames ‘cyber attack' for fraud

The recent episode raises a question mark on the efficiency of the SWIFT network as how secure it is.

A day after it emerged that Chennai's City Union Bank was hit by a fraud, the bank's CEO said on Sunday that "cyber criminals" had hacked its systems and transferred nearly $2 million through three unauthorised remittances to lenders.

Just like the fraud at Punjab National Bank (PNB), no entries of remittances were made in the ledgers of City Union Bank and transfers were pushed through the SWIFT financial platform.

Chief executive officer N. Kamakodi called it a "conspiracy" involving multiple countries, and added the lender was still investigating how it had happened, said a report published in Livemint.

"This is basically a cyber attack by international cyber criminals," he told Reuters in a phone interview.

Chennai-based City Union Bank had earlier said the transfers had been made through correspondent banks even though it had not requested the transfers.

Of the 3 fraudulent remittance, one remittance was made through Standard Chartered Bank, New York, to a Dubai based bank for USD 5,00,000 which was blocked immediately and was returned to City Union Bank.

A second transfer of 300,000 euros (USD 372,150) was routed through a Standard Chartered Bank account in Frankfurt to a Turkish account, while a third totalling USD 1 million was sent through a Bank of America account in New York to a China-based bank.

The recent episode raises a question mark on the efficiency of the SWIFT network as how secure it is. PNB fraud pertains to issuance of fake Letters of Understanding (LoUs) to companies associated with billionaire jeweller Nirav Modi by errant PNB employees which enabled these companies to raise buyers credit from international branches of other Indian lenders.

OneIndia News