Some customers in these cities earlier this month found that when they tried to transfer funds using the Immediate Payment Service (IMPS) from their IDFC First Bank savings accounts to Uco Bank, the amount got credited into the Uco Bank account without getting debited at IDFC First, according to the preliminary findings by Uco Bank. The first such erroneous transaction was noted on November 10.
The news became viral and in the next three days, the glitch was exploited by many account holders in Jaipur and Jodhpur, according to two people familiar with the matter.
The credit to the Uco Bank accounts happened despite the system generating “failed” transaction reports, people in the know said.
“The transactions observed by the bank were due to internal technical issues as a result of which certain account holders of our bank have received some erroneous credits via IMPS,” Uco informed the stock exchanges last week.
The Kolkata-based bank did not respond to ET’s follow-up queries. An email to IDFC First Bank also did not elicit any response.
IMPS is a payment mechanism for instant money transfers, facilitated by National Payment Corporation of India. A bank customer can transfer funds instantly through IMPS using online or mobile banking.Realising the glitch, Uco Bank took its IMPS channel offline, even after saying that there was no issue on the platform. It blocked the recipients’ accounts and recovered Rs 649 crore, or 79% of the amount wrongly credited.
“Our top management is closely monitoring the matter. There are some preliminary findings. But it is still to be ascertained on whether it happened due to a human error or system failure. The Central Bureau of Investigation is looking into the matter,” a senior bank official said on the condition of anonymity.
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