Amid Nirav Modi’s Rs 11,400 crore scam, City Union Bank makes SWIFT move to assuage fears

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Updated: February 19, 2018 2:54:09 PM

The cyber fraud-struck City Union Bank on Monday clarified that except the word ‘SWIFT’ nothing common exists between its case and PNB’s Rs 11,500 crore scam. The issue of the bank is related only to a cyber attack, City Union Bank said.

Uttar Pradesh budget 2018, Uttar Pradesh budget fiscal defecit, , Gross State Domestic Product, States Gross Domestic ProductThe cyber fraud-struck City Union Bank on Monday clarified that except the word ‘SWIFT’ nothing common exists between its case and PNB’s Rs 11,500 crore scam. (Image: Reuters)

The cyber fraud-struck City Union Bank on Monday clarified that except the word ‘SWIFT’ nothing common exists between its case and PNB’s Rs 11,500 crore scam. The issue of the bank is related only to a cyber attack, City Union Bank told CNBC TV18. In PNB scam too, certain account holders in connivance with bank’s employees generated fake Letters of Understanding (LoU) by misusing the SWIFT technology of the bank. The Indian lender reported on Saturday that three “fraudulent remittances” of nearly $1.8 million had been pushed through the SWIFT financial platform of the bank. The bank said that the money transfers had been made through correspondent banks even though the Indian lender had not requested the same. It has successfully retrieved or blocked money in two out of three cases, the bank told CNBC TV18. It also told CNBC TV18 that out of $1.8 million that was sent out, blocked or retrieved about 0.8 million has already been retrieved. There is no evidence of involvement of the internal staff in the cyber attack, the bank also told.

The bank fraud comes after $81 million were stolen from the Bangladesh central bank in 2016 in a cyber heist. The other major scam that is making headlines in the country is a Rs 11,400 crore Punjab National Bank scam.  The bank notified the stock exchanges on 14 February about the fraudulent and unauthorised transactions that took place in one of the its branches in Mumbai. In the same notification, the bank informed that some of the account holders have been benefited by acting in connivance with some of the bank officials.

The shares of PNB feel heavily as a result.  It was learnt thereafter that the banks’ SWIFT technology platform was misused to generate Letters of Undertakings to the overseas banks. Once the matter was transferred to the government enforcement agencies it was learnt that the scam has spread to multiple banks. In all these cases, the accused bank officials released fake LoUs by misusing SWIFT technology platform of the bank.

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