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Monday, 19 February 2018 10:28

US$2m exfiltrated from Indian bank using SWIFT system


The holders of three accounts are believed to be involved in "fraudulent remittances" from India's City Union Bank to the tune of about US$2 million.

According to a Reuters report, the bank claimed that it had been hacked by "cyber criminals" who were responsible for the three unauthorised remittances which were made using the SWIFT banking platform.

SWIFT is headquartered in Belgium and provides a network that allows financial institutions in more than 200 countries to send and receive information about financial transactions to each other. Most SWIFT members are banks, and trading institutions, according to security expert Matthieu Suiche who runs a security firm in the United Arab Emirates.

In April last year, there were reports that the NSA had compromised at least parts of the system, after exploits created by the agency were dumped online by a group calling itself the Shadow Brokers.

The money stolen from City Union Bank was sent through correspondent banks to accounts in Dubai, Turkey and China, the bank's chief executive Dr N. Kamakodi said.

He described it as a conspiracy involving a number of countries and while there was no evidence of staff involvement, "we are very clear now the account holders are part of this conspiracy".

The news of the City Union Bank fraud comes on the heels of an announcement from India's Punjab National Bank that it lost US$1.7 billion in a fraud where officials used to take percentage commissions in lieu of issuing letters of undertaking and foreign letters of credit to diamond czar Nirav Modi and his partner Mehul Choksi and their firms.

The City Union Bank said that it had been able to block one of the remittances of US$500,000 being sent to a Dubai-based lender through a Standard Chartered Bank account.

Another transfer of 300,000 (US$372,150) was sent through another Standard Chartered Bank account in Frankfurt to an account in Turkey. The recipient had blocked finalisation of the transfer, the report said.

Dr Kamakodi identified the recipient bank of a third transfer as being the Zhejiang Rural Credit Co-operative Union in Hangzhou, China. This transfer was for US$1 million and was sent through an account in the Bank of America.

Reuters said more than 100 financial institutions in India are connected to SWIFT, including the Reserve Bank of India, the country's central bank.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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