Central Bank Of India Reports Rs 13.97 Crore Fraud In RBI Settlement Account

The Central Bank of India has reported unauthorised transfers worth Rs 13.97 crore from its settlement account with the Reserve Bank of India (RBI). Mumbai Police have registered a first information report (FIR) against unidentified persons to investigate the suspected fraud.

The bank's complaint alleges that the transfers took place between October 15 and October 17 after unknown persons gained unauthorised access to a central financial messaging server operated by Indian Financial Technology and Allied Services (Iftas), an RBI subsidiary.

187 Transfers Made Over Three Days

According to the complaint filed by the bank's general manager (treasury), six unauthorised transfers took place on October 15. The number rose to 88 on October 16, followed by 93 transactions on October 17.

The money was transferred to 36 bank accounts, the complaint noted. However, the bank's internal team could not trace any of the 187 transactions through its branches, internet banking, mobile banking or other banking channels.

The transfers were also absent from the bank's core banking system, its Real Time Gross Settlement (RTGS) settlement account records and its own Structured Financial Messaging System (SFMS) server.

Investigators found partial traces of 10 accounts in SFMS database logs, but the corresponding transaction identification numbers were missing from the bank's records. The complaint also noted that the accounts listed as the sources of the transfers did not belong to the Central Bank of India.

Investigators had limited information about how the transactions were carried out, making it difficult to determine how the money was diverted, according to a news report by the Hindustan Times.

SFMS Server Access Suspected In Fund Diversion

SFMS allows banks to exchange financial messages for payments processed through the RBI's RTGS and National Electronic Funds Transfer (NEFT) systems.

Under the usual RTGS process, a bank first records a customer's payment instruction in its core banking system. It then debits the customer's account and credits the amount to its RTGS settlement account. A payment message travels through the bank's SFMS server to IFTAS's central server, which facilitates the corresponding debit from the bank's settlement account with the RBI.

The complaint alleges that the unidentified persons exploited this messaging infrastructure to move funds without the transfers appearing in the bank's internal systems.

Police Register Case, Probe Underway

Central Bank of India reported that it had alerted the RBI, IFTAs, the Daksh portal, the National Critical Information Infrastructure Protection Centre (NCIIPC) and the Indian Computer Emergency Response Team (CERT-In).

The FIR was registered at Mumbai's Nodal Cyber Police Station. The case involves allegations of cheating and impersonation against unknown persons.