Economic Fraud
IndusInd Bank Loses Rs 40 Crore in ‘Online Robbery’; RBI and Police Investigate Banking Officials
The Reserve Bank of India (RBI) and police are investigating the involvement of bank officials in this cyber fraud case. The swift action by Maharashtra Cyber Police led to the recovery of Rs 32 crore. Experts are questioning the adherence to RBI’s fraud risk management and information security regulations, and the roles of bank officials are under close scrutiny.
Mumbai: In a significant cyber fraud incident, IndusInd Bank in Mumbai reported a loss of Rs 40 crore due to unauthorized transactions. The Maharashtra Cyber Police managed to recover Rs 32 crore, marking a major success in one of the state’s largest cyber fraud cases in terms of the amount lost.
The bank’s Hyderabad branch manager is the prime suspect, allegedly making unauthorized transactions. The swift action by Maharashtra Cyber Police was facilitated by the quick reporting of the crime through the National Cybercrime Reporting Portal (NCCRP). This prompt response enabled the authorities to trace and freeze the fraudulent accounts.
The fraudulent transactions included two significant transfers of Rs 15 crore and Rs 25 crore, made by the Hyderabad branch manager without authorization from the bank’s Mumbai head office. The funds were dispersed across nearly 20 accounts. Despite the FIR being registered in Hyderabad, the initial complaint originated from Mumbai.
An officer from Maharashtra Cyber Police explained that the team immediately initiated follow-up procedures upon observing the complaint on July 19. By coordinating with all relevant financial intermediaries, they successfully placed a hold on approximately Rs 31 crore by 6 PM on the same day. Their continuous efforts resulted in the recovery of Rs 32.89 crore.
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The incident has raised concerns among experts about whether the bank adhered to the Reserve Bank of India’s (RBI) Master Regulation on Fraud Risk Management and the Information Security Management System. These guidelines, which include a robust internal audit and controls framework, are crucial for preventing such incidents.
The roles of the “maker” and “checker” within the bank, essential for ensuring proper checks and balances, are currently under scrutiny by both the police and the RBI. This examination aims to identify any lapses in following the prescribed procedures and maintaining internal controls.
Maharashtra Cyber Police oversees cybercrime complaints through the NCCRP portal and the national cyber-crime helpline (1930). The helpline handles 4,000-5,000 complaints daily, maintaining a 100 percent answer rate with a dedicated team of over 110 professionals working around the clock.
From 2021 to July 26, 2024, the helpline registered 2,81,019 complaints, resulting in the recovery of Rs 3,324.90 crore in fraudulent transactions, with Rs 358.77 crore put on hold. This highlights the efficiency and dedication of the team in managing and resolving cybercrime complaints. The ongoing investigation will provide insights into compliance with RBI regulations and the effectiveness of internal checks within the bank, helping to mitigate future incidents.
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