RBI-Maintained Kangra Co-operative Bank Account Duped in Rs 7.79 Crore Cyber Fraud

In a shocking incident of cyber fraud, an astounding amount of Rs 7.79 crore has reportedly been siphoned off from the Kangra Co-operative Bank’s current account, which is maintained by the Reserve Bank of India (RBI).

The incident has left top officials bewildered, as the bank is under the financial supervision of the RBI, and the fraudulent transactions occurred within the regulator itself. The authorities have been unable to ascertain the identity of the person behind the cyber theft, although the Kangra Bank officials claim to have identified the recipient accounts.

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The Senior Manager (IT) of Kangra Bank, Sahdev Sangwan, lodged a complaint with the Delhi Police, leading to the filing of an FIR in the first week of May. An ongoing investigation is currently underway to uncover the details of this audacious cyber fraud.

The complaint by Sangwan states that Kangra Bank maintains a current account with the RBI for conducting various banking transactions such as Real Time Gross Settlement (RTGS), National Automated Clearing House (NACH), National Electronic Fund Transfer, and Check Truncated System for its customers.

As per the process followed by Kangra Bank and the RBI, the bank has issued a standing instruction to transfer Rs 4 crore daily from the current account to a settlement account. This arrangement facilitates the bank to offer RTGS and NACH services to its customers. At the end of each day or the early hours of the next day, the RBI sends an email statement to the bank, outlining all the transactions executed in the settlement account throughout the day. The Kangra Bank officials cross-verify the statement, and the remaining funds are transferred back to the current account from the settlement account.

The alarm was raised on April 20, 2023, when Kangra Bank officials discovered an anomaly in the statement received from the RBI. They noticed a discrepancy of over Rs 3.14 crore, which indicated that a significant amount was not transferred from the settlement account to the current account. Despite informing the relevant authorities, including the RBI and other financial security departments, no conclusive explanation was found for the substantial mismatch.

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To their dismay, similar discrepancies occurred in the following two days as well. On both April 21 and April 22, the current account received over Rs 2.40 crore and over Rs 2.23 crore less, respectively, from the settlement account. The cumulative suspected fraud amount over the three days amounted to a staggering Rs 7.79 crore.

In the complaint filed by Sangwan, it was revealed that the Kangra Bank has also identified accounts with other banks into which the fraudulently withdrawn amount has been transferred. However, the individuals responsible for the fraudulent transactions remain unidentified. The Delhi Police suspect cyber hacking or tampering, as the accused seem to be unknown to the bank.

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Kangra Co-operative Bank Ltd, which originated as a small thrift/credit society in March 1960, gained permission from the RBI in 1972 to carry out banking activities. Today, with 12 branches located across various parts of Delhi, it stands as one of the largest urban co-operative banks under the administrative control of the Delhi Government through the Registrar of Cooperative Societies.

The ongoing investigation seeks to delve into the intricacies of this cyber fraud, as both the Kangra Bank and the RBI work closely together to enhance security measures and prevent future incidents of this nature.

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