Plug IT loopholes that enabled PNB fraud, govt tells state-owned banks

As per PNB, its core banking system (CBS) was not integrated with SWIFT and that helped staff bypass the system undetected and issue fraudulent transaction messages to other banks.

The Department of Financial Services under the Ministry of Finance will hold talks with the information technology team of all public sector banks (PSBs), in wake of fraud worth Rs 11,400 crore unearthed at state-owned Punjab National Bank.
 
The meeting will plug lapses in the IT system that led to such a massive scam. 
 
It will also delve into putting a system to ensure that PNB like scam does not occur in future, officials said.
 
The department has also asked all public sector banks (PSBs) to unearth the technology lapses that enabled the scam of fraudulent Letters of Undertaking (LoUs) issued on behalf of the Nirav Modi and Mehul Choksi groups of companies, to foreign branches of Indian banks.
 
"We have asked all banks to integrate their core banking system (CBS) with the SWIFT [Society for Worldwide Inter-Bank Financial Telecommunication] system," a senior official was quoted as saying.
 
As per PNB, its CBS was not integrated with SWIFT and that helped staff bypass the system undetected and issue fraudulent transaction messages to other banks.
 
"Banks need to put systems in place to ensure security of transactions is not compromised," the official told Business Standard.
 
Besides, the banks have been asked to immediately roll out a rotation policy for staffers. 
 
Source: Business Standard

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