Attendees work on a laptop at a hackathon in New York. (Photographer: Victor J. Blue/Bloomberg)

Hackers Steal Rs 94 Crore By Breaking Into Cosmos Bank’s Server

Fraudsters hacked into the server of a cooperative bank in Pune, Maharashtra, to take out Rs 94 crore in a second such cyber breach reported at an Indian bank this year.

Hackers based outside the country are suspected to have carried out the fraud at the Cosmos Bank, according to an official of the Pune Police who didn’t want to be identified as the probe is still on. The cybercrime division is investigating the fraud.

Using 450 international Visa debit cards, 12,000 transactions took place in 2 hours and 13 minutes from ATMs and other locations across 21 countries on Saturday, Cosmos Bank chairman Milind Kale told reporters in Pune, according to wire agency PTI. “It's a big criminal racket.”

In two days, hackers withdrew a total Rs 78 crore from various ATMs in 28 countries, including Canada, Hong Kong and a few ATMs in India, and another Rs 2.5 crore were taken out within India.
Milind Kale, Chairman, Cosmos Bank

In India, 2,800 false transactions of Rs 2.5 crore using 400 debit cards took place, he said. “It’s an international attack on the banking system. No customer account was affected; dummy cards were used and the switching system of the bank was hacked.”

Officials of the bank filed a complaint with the police, the Indian Express had reported citing the FIR, adding that the lender suspected a cyberattack on the ATM switch at the bank’s headquarters. BloombergQuint wasn’t immediately get in touch with the bank’s management.

Modus Operandi
Kale explained that while cloning the cards and using a “parallel” or proxy switch system, the hackers self-approved the transactions and withdrew over Rs 80.5 crore in about 15,000 transactions. He added that the lender’s core banking system was not affected by the attack. 

Earlier this year, City Union Bank had said that hackers based overseas transferred $2 million through three unauthorised transactions via the SWIFT messaging system, the news agency Reuters reported. That was similar to the 2016 heist at the Bangladesh central bank when cyber attackers siphoned $81 million.

The RBI, in June 2016, had released guidelines on how banks can set up their own cybersecurity framework after getting it approved by their respective boards. In October that year, it again urged bankers to set up their own cybersecurity framework to better manage instances of fraud, following a case of customer data being hacked through the automated teller machine network of some banks. The regulator also formed an inter-disciplinary committee on cybersecurity in February 2017.

In a statement on Wednesday, the National Payments Corporation of India Ltd. clarified that one of its network members (Cosmos Bank) had confirmed a malware attack on its system, which led to a fraud in which over Rs 90 crore was siphoned.

“NPCI wishes to reiterate that our systems are fully secure and this particular issue has occurred within the bank’s own IT environment,” the statement read. “NPCI will continue to extend it's support to the affected bank in identifying the cause of this fraud."

(With inputs from PTI)