Published: Wed, February 21, 2018
World | By Paul Elliott

After PNB, City Union Bank hit by fraud

After PNB, City Union Bank hit by fraud

The bank blocked one of the remittances for US$500,000 that was being sent through a Standard Chartered Bank account in NY to a Dubai-based lender and another transfer of Euro 300,000 (US$370,110) routed through Frankfurt to Turkey. Officials blocked a sum of Euro 300,000 after it ended up in a Turkey-based bank account.

CYBERCRIMINALS have transferred US$2 million from India's City Union Bank through three unauthorized remittances to lenders based overseas via the SWIFT financial platform, the institution revealed over the weekend. "We immediately alerted the correspondent banks to recall the funds", City Union Bank said in a regulatory filing on stock exchanges.

In an interview, City Union Bank CEO N Kamakodi told Reuters that there are similarities with the Bangladesh Bank hack, which saw crooks use malware to disable the Swift printer before stealing $81 million. The fund was blocked in the beneficiary's account in the Turkey Bank.

However, a third transfer of $1m sent via a Bank of America account in NY to Zhejiang Rural Credit Cooperative Union in Hangzhou, China, appears to have succeeded.

N. Kamakodi, the Chief Executive Officer, said that it is a conspiracy that involved various countries.

During our reconciliation process on 7th February 2018, it was found that 3 fraudulent transactions were initiated by the cyber criminals gaining access into our system illegally and not initiated from our Bank's end.

He further mentioned that we successfully retrieved/blocked money in two out of the three cases.

The hackers stole the money from Bangladesh Bank's account at the Federal Reserve Bank of NY using fraudulent orders on SWIFT.

According to court documents reviewed by Reuters, branch deputy manager Gokulnath Shetty issued a series of fraudulent Letters of Undertaking to other banks so that they would provide loans to a group of Indian jewellery companies.

Shares of CITY UNION BANK LTD. was last trading in BSE at Rs.174.8 as compared to the previous close of Rs. 168.1. CUB has taken necessary legal and diplomatic actions with the help of Indian Consulate, Istanbul, Turkey to repatriate the amount. He then failed to record the transactions on the bank's internal system - something required because the software was not linked to Swift.

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