Due to fears that the card data may have been stolen in one of India’s largest-ever cyber security incidents, a slew of banks in the country are replacing or asking their customers to change security codes of as many as 3.25 million debit cards.

The chief of NPCI, which also runs the biggest network of shared ATMs, said that  after receiving complaints from some banks that their clients’ cards had been fraudulently used mainly in China and the United States even though they were in India, card network providers Visa, MasterCard, and home-grown RuPay run by the National Payments Corp of India (NPCI) swung into action in September.

NPCI Chief Executive A.P. Hota said in a statement that there was a possible compromise of one of the payment switch provider’s systems. A part of the back-end network aiding ATM operations is called a switch.

Hota said: “Necessary corrective actions already have been taken and hence there is no reason for bank customers to panic.” And added that the card network providers had alerted all affected banks and the advice to banks to replace cards was a “preventive exercise”.

Saying that the breach involved some 90 ATMs, Hota earlier said that of the debit cards affected, while 600,000 are on RuPay, about 2.65 million are on Visa and MasterCard platforms.

Visa and Mastercard said in separate statements that they were aware of the issue and were working with banks, regulators and others to support investigations even though their own networks had not been compromised.

The number of cards affected accounts for just 0.5 percent of the nearly 700 million debit cards issued by banks in India even as the potential breach impacts a large number of debit card holders.

Sources with direct knowledge said the issue stemmed from a breach in systems of Hitachi Ltd subsidiary Hitachi Payment Services, which manages ATM network processing for Yes Bank Ltd even though the NPCI did not name the payment switch provider whose systems it found had been compromised.

Yes Bank found no evidence of any breach after it had proactively undertaken a review of its ATMs, the bank said in a statement on Thursday. To ensure safety and security of its ATM network and payment services, it continued to work with other banks and the NPCI, the bank said.

It t was investigating the matter, including whether there was a malware problem, said a Hitachi spokeswoman.

After being informed by card network providers about a breach outside its network, it had blocked cards of certain customers and it was replacing those cards as a proactive measure, said State Bank of India, the nation’s top lender.

While claiming there would not be any significant financial loss, Mrutyunjay Mahapatra, a deputy managing director at SBI, told Reuters that the bank has found about 620,000 of its more than 200 million cards “vulnerable”.

According to NPCI, the money involved was 13 million rupees ($194,612) related to complaints of fraudulent cash withdrawals affected a total 641 customers of 19 banks.

(Adapted from Reuters)

Categories: Economy & Finance