RBI Imposes Hefty Fine On Bank For Security Lapse As Hackers Make Off with Over Rs 12 Cr

AP Mahesh Cooperative Urban Bank has been imposed a penalty of Rs 65 lakh by the Reserve Bank of India (RBI) for non-compliance with the Cyber Security Framework for Cooperative Banks

After conducting a cyber audit and collaborating with the Hyderabad police, the RBI has imposed a penalty on AP Mahesh Cooperative Urban Bank. The investigations uncovered significant vulnerabilities in the bank’s systems, which facilitated a security breach by hackers resulting in a staggering theft of Rs 12.48 crore.

On January 24, 2022, AP Mahesh Co-operative Bank fell victim to a bold online heist, leading to a substantial loss of Rs 12.48 crore. The subsequent police investigation shed light on the hackers’ modus operandi. They employed sophisticated phishing techniques, sending meticulously designed emails to the bank’s employees, embedding malicious software. Unaware of the imminent threat, the unsuspecting employees unwittingly opened these emails, granting the hackers unrestricted access to the bank’s internal systems. 

Due to this breach, the hackers successfully conducted fund transfers without authorisation.

The police and RBI investigations unveiled substantial flaws in the cybersecurity protocols implemented by AP Mahesh Cooperative Urban Bank. These vulnerabilities were of such gravity that Hyderabad police commissioner, CV Anand, felt compelled to write to the RBI governor, expressing deep concerns regarding the bank’s critical security shortcomings.

Commissioner Anand went as far as recommending the suspension of the bank’s operating licence due to the severity of the negligence witnessed.