CBI has successfully investigated a fraud in UCO Bank where two support engineers manipulated the system which resulted in credits to accounts without a corresponding transfer of money from the sending bank to the receiving bank.
See report in NewIndian Express
The fraud involved 8.53 lakh transactions resulting in credit to the accounts of customers. Some of them either knowingly or unknowingly withdrew the amount. Most of the amount has since been recovered.
However the incident which could be a sophisticated fraud or a technical glitch needs to be taken seriously by security experts and remedial measures are required to be taken.nt.
If the fraudsters had later withdrew the money and transferred it into the fraudster’s account as it happens in many phishing credits, the account holder would be accused of money laundering and his account would be frozen even if the balance is more than the disputed amount. In many such instances, innovent customers are left with frozen accounts for reasons they are not aware of.
One reason why even genuine customers may not be able to recognize the wrong credit is because today’s technology bankers donot provide full description of the transactions in the account. They only provide a transaction code which only they can decypher. It is important that as in the manual banking era, the description of credit has to indicate the source account number and name of the sender along with any purpose indicated by him all of which are captured at the sender’s end.
The least the Banks can do is to ensure that if the recipient clicks on the credit entry, the transaction ID should be deciphered and the details provided without the need to raise any help ticket.
RBI should work on this technology change to prevent blaming the genuine customers who without knowing the nature of the false credit may withdraw the money in due course.
I request REBIT to work on this updation of Banking software in consultation with the CBS software developers.
This incident falls within the “Jago Regulator Jago” campaign that we are highlighting since it has become a fashion to introduce technology with inadequate securities and then blame the public for the consequences.
It is an established principle of law that if the Bank customer has innocently altered his position with the knowledge of the balance in his passbook, the money can only be recovered without coercion. If the amount is in several lakhs it may be possible for the customer to realize that it was an erroneous credit. But if it is in few thousands, many customers may not think it is a wrong credit. They may think that it may be an arrears of pension or some thing similar. Hence it would be wrong to blame them for misappropriation if they have withdrawn the balance. In such cases thee “Negligence” of the Bank should be punished. If any account has been frozen in such cases, compensation should be paid to the customer for inconveniencing him.
If any cheques are dishonoured in the process, it has to be considered as “Wrongful Dishonour” and Bank should pay compensation.
Hope RBI makes necessary changes in this regard to the Account rules.
Naavi
