Japanese banks crippled by systems outage affecting $81B of interbank transfers

Paul Godfrey
·2 min read
UPI
JPMorgan Chase was one of 11 banks in Japan hit by a systems outage Tuesday affecting the country's largest electronic clearing network that left more than a million customers unable to transfer money to accounts at other banks. File photo by John Angelillo

Oct. 10 (UPI) -- A clearing systems outage affecting 11 of the largest banks in Japan on Tuesday, including MUFG, Mitsubishi Trust and JPMorgan Chase, left more than a million customers unable to make electronic transfers to other banks.

The Zengin interbank data communication system remained down Tuesday evening local time but instructions already accepted would be processed via a back-up system and arrive in destination accounts by the end of the day, said the Japanese Banks' Payment Clearing Network, which operates Zengin-Net.

The Japanese banks' clearing network said it was the first failure of the system in the 50 years since it began operating in 1973.

Affected banks included Resona Bank, Saitama Resona Bank, Kansai Mirai Bank, Yamaguchi Bank, Kitakyushu Bank, Mitsubishi UFJ Trust and Banking Corp., Custody Bank of Japan, JPMorgan Chase Bank, Momiji Bank and Shoko Chukin Bank.

Resona Bank warned it was possible transaction requests would not be completed on Tuesday as it was not possible to transfer funds to any other bank

MUFG Bank, the country's largest bank, said it was unable to complete transfers to other banks requested online and using ATMs, including those at some convenience stores. It was likewise not possible to receive funds transferred from those same banks, MUFG added.

The so-called Zengin system is used by most of Japan's banks, with 6.5 million transactions worth $81 billion being processed by the system every day.

In August, a systems meltdown at the Bank of Ireland shut customers out of online and mobile app banking for several hours. The glitch also allowed customers to make large ATM withdrawals of cash that wasn't theirs.

In June 2021, media outlets, airlines and financial institutions around the world were hit by two mass Internet outages within days, forcing the Reserve Bank of Australia to cancel a planned auction of government bonds due to issues at international banks that were scheduled to participate.

The outage also affected the Hong Kong Stock Exchange, Discover and Navy Federal Credit Union in the United States and Australia's Commonwealth Bank. Airline Virgin Australia and U.S. carriers Delta, American, Southwest and United were also hit

News, retail and entertainment sites and apps went dark, including CNN, The New York Times, Hulu, HBO Max, Spotify, Amazon and Target.