Ransomware Attack Disrupts 300 Small Banks Across India

A ransomware attack on a technology service provider has led to the temporary shutdown of payment systems across nearly 300 small local banks in India, according to two sources familiar with the situation.

The incident impacted C-Edge Technologies, which supplies banking technology systems to these banks.

The National Payment Corporation of India (NPCI), which oversees payment systems, issued a public advisory late on Wednesday. It stated that it had "temporarily isolated C-Edge Technologies from accessing the retail payments system operated by NPCI." This measure was taken to prevent any broader impact on the country's payment network.

Impact on Small Banks

Customers of banks serviced by C-Edge will not be able to access payment systems during this isolation period, NPCI confirmed. Nearly 300 small banks have been isolated from the broader payment network as a precautionary measure, said officials at a regulatory authority.

India has approximately 1,500 cooperative and regional banks, many of which operate outside major cities. Some of these banks have been affected by the attack, according to sources. "Most of these are small banks and only about 0.5% of the country's payment system volumes would be impacted," one source noted.

Response and Audit

C-Edge Technologies did not respond to an email from Reuters seeking comment on the situation. Similarly, the Reserve Bank of India (RBI) did not respond to Reuters' request for comment either. An audit is being conducted by NPCI to ensure that the ransomware attack does not spread further, according to a second source.

The RBI and Indian cyber authorities have recently warned banks about potential cyber attacks. These warnings were issued in light of increasing cyber threats, as confirmed by banking industry sources and one of the initial sources.