Indian bank races to recover £80m mistakenly issued to customers’ accounts
A public sector bank in India is racing to recover around Rs 8.2bn (£80m) that was mistakenly issued to account holders in "erroneous" transfers.
United Commercial Bank (UCO) explained that an error in its online transfer services meant the bank paid out to customers for transactions initiated by customers of other banks, despite UCO not actually receiving the funds themselves.
The bank said that it was investigating the “internal technical issue” that impacted the Immediate Payment Service (IMPS) from 10 to 13 November, and in the meantime it has disabled IMPS.
UCO said on Thursday it has recovered £62m or 79 per cent of the amount that was mistakenly credited to accounts.
IMPS is used to send and receive money instantly through phone apps or internet banking. The platform is operated by the National Payments Corporation of India (NPCI).
“By taking various proactive steps, the bank blocked the recipients’ accounts and has been able to retain and recover around Rs 6.49bn (£62m) out of Rs 8.2bn (£80m), which is about 79 per cent of the amount,” the bank said in its stock exchange filing.
The bank said it has initiated actions to recover the remaining amount and reported the incident to law enforcement agencies for "necessary action".
“The bank reiterates and assures that all other critical systems are operational and available. The bank continues to provide safe and secured services to customers.
"The financial impact, if any, due to the aforesaid is yet to be ascertained and the bank will endeavour to intimate the same on ascertainment,” it added.
The bank reported a 20 per cent decline in its net profits to Rs 4.02bn (£38.9m) for the quarter that ended September 2023 as compared to Rs 5.05bn (£48.9m ) in the corresponding quarter a year ago, according to news agency PTI.
The bank is headquartered in India’s eastern city of Kolkata.
