PNB fraud: Former RBI deputy governor had warned about SWIFT

“We have witnessed an attempt to defraud a bank by abusing the SWIFT messaging system which thankfully could be salvaged post event without any apparent monetary loss.”

GN Bureau | February 20, 2018


#diamond   #Punjab national bank   #Nirav Modi   #RBI   #PNB scam   #PNB fraud   #SS Mundra  
PNB fraud: RBI deputy governor had warned about SWIFT
PNB fraud: RBI deputy governor had warned about SWIFT

A top Reserve Bank of India official had waved the red flag, a year back, regarding the SWIFT messaging system. SWIFT was used in a fraud amounting to Rs 11,000 crore at a Punjab National Bank branch that benefited billionaire diamond jeweler Nirav Modi.

 
Former RBI deputy governor SS Mundra, while speaking at a seminar on financial crimes management on January 30, 2017, said: “In recent times, we have seen several high profile cyber-incidents both in India as well as globally. You will remember the Bangladesh Bank incident which rattled banks/central banks and forced us to look more closely at cyber security risks. There is an increasing trend in incidents pertaining to theft of personal information, abuse of ATMs and Distributed Denial of Service (DDoS) attacks on various banks.”
 
He then said: “We have already witnessed an attempt to defraud a bank by abusing the SWIFT messaging system which thankfully could be salvaged post event without any apparent monetary loss. We also continue to receive information on several other cyber incidents- be it ransomware attack, ATM / Debit card incident or unauthorised access to bank servers. Phishing / Vishing also continue to haunt bank customers with such attacks becoming more and more sophisticated.”
 
Mundra noted that technology adoption by banks and other financial entities has increased manifold in the recent years and today if a bank is not present in the digital world it would be well-nigh impossible for it to compete in the market. As technology evolves from being an enabler and differentiator to being at the core of the banks’ operations, associated issues of security need to be addressed comprehensively.
 
“In October 2016, G-7 countries came out with what is called as ‘Fundamental Elements of Cyber Security for the Financial Sector’, which covers cybersecurity strategy and framework, governance, risk and control assessment, monitoring, response, recovery, information sharing and continuous learning as key elements.
 
“The Committee on Payments and Market Infrastructures (CPMI), BIS and the International Organization of Securities Commissions (IOSCO) have issued Guidance on cyber resilience for financial market infrastructures (FMIs) which also emphasises on the importance for authorities to cooperate to support broader financial stability objectives. The Bank of England (BoE) has implemented “CBEST”, a new framework for testing cyber security vulnerabilities, particularly in respect of core financial sector entities. Hong Kong Monetary Authority has announced the launch of a “Cybersecurity Fortification Initiative” (CFI), a comprehensive initiative aiming to raise the level of cybersecurity of banks,” he added.
 
The top RBI official went on to say that closer home, RBI issued a circular on Cyber Security Framework in Banks on June 2, 2016 mandating cyber security preparedness.
 
“A specialised cell (C-SITE) has been created within the supervision department of RBI to conduct detailed IT examination of banks’ cyber security preparedness, to identify the gaps and to monitor the progress of remedial measures. More than 30 major banks are slated to be covered under detailed IT examination during 2016-17 and all banks by 2017-18. RBI’s IT subsidiary (the Reserve Bank Information Technology (ReBIT) Pvt Ltd has also become operational with a mandate to focus on issues around IT systems and cyber security (including related research) of the financial sector and to also assist in the audit and assessment of the entities regulated by the Reserve Bank.”
 
Read: SS Mundra’s full speech here 

 

Comments

 

Other News

On a personal note: DIVINE

An underground rapper who grew up on Mumbai streets, Divine spins his music around his environment and poverty. His breakout single, ‘Meri Gully Mein’, along with fellow rapper Naezy caught Bollywood’s attention. The Hindi film ‘Gully Boy’ is inspired by their lives and gr

The role model for an IAS officer

Anil Swarup, an IAS officer of Uttar Pradesh cadre who retired in 2018, is a model bureaucrat who retained his optimism right till the end of service and exemplified dedication and commitment. His excitement at the opportunities that a job in the IAS provided is evident on every page of his new book publis

Reform of the civil services: At home and away

The question of reform of the civil services has been debated extensively at all levels at least over the last five to six decades after independence. Indeed, it was soon perceived that the Indian Administrative Service (IAS) may not be well equipped to deal with the problems of an emerging developing coun

The greatest challenge for any government

Shouting vengeance at all and sundry while wriggling out of holes of our own making seems to be our very special national characteristic. Some recent instances are illustrative of this attribute. A number of business tycoons with thousands of crores of unresolved debts have fled abroad with the government

The mysterious case of CBI’s legality

The Central Bureau of Investigation (CBI) came into existence, based on a Resolution of the home ministry, dated April 1, 1963 – a sheer coincidence that it also happens to be April Fool’s day. Over the past few months, we have seen the CBI live up to its founding day with great zeal, being i

The Evolution of Modi

Gujarat was passing through a turbulent phase in the 1980s. The decade began middle class agitations against new reservation policies, and the caste friction turned communal under the watch of chief minister Madhavsinh Solanki, alienating majority of urban population on both counts. The ground was ripe for

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter