FinMin in damage-control mode on debit cards security breach | business-news | Hindustan Times
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FinMin in damage-control mode on debit cards security breach

As reports of data breaches at the country’s leading banks surfaced on Thursday leading to fears that million of credit card information have been compromised, the finance ministry quickly sprung into action and asked all public sector lenders to take steps to ensure it does not turn into a full-blown crisis.

business Updated: Oct 21, 2016 11:11 IST
Mahua Venkatesh
Finance ministry

A man counts money after withdrawing it from a State Bank of India ATM.(REUTERS)

As reports of data breaches at the country’s leading banks surfaced on Thursday leading to fears that million of credit card information have been compromised, the finance ministry quickly sprung into action and asked all public sector lenders to take steps to ensure it does not turn into a full-blown crisis.

According to government sources, top officials in the finance ministry are in constant touch with SBI chairman Arundhati Bhattacharya, and have asked the Indian Banks’ Association to direct lenders to replace debit cards wherever needed.

As a precautionary measure, most banks are likely to ask customers to change their personal identification numbers, sources added.

The Reserve Bank of India has already roped in other investigative agencies to get to the bottom of the issue.

Sources said that until now, SBI has reported a loss of R12.5 lakh due to the security breach. The amount is expected to go up further in the next few days.

“We are in constant touch with the SBI chairman, she has taken all steps to protect the bank’s customers... the banks has decided to replace the debit cards for many of its customers totally free of cost,” a senior official of the finance ministry, who did not wish to be identified, told HT.

Between April 2011 and September 2014 (the latest for which data is available), banks have reported a total of 27,614 credit-card related frauds and another 3,835 debit-card related deceptions.

“If need be, the IBA has been asked to direct other banks to undertake similar exercise,” said the official quoted above.

While SBI sent out an advisory to customers to change the PIN—the secret number used while transacting through cards—only 7% took note of it, according to sources.

While no other public sector bank has until now complained of any discrepancy, the issue is being thoroughly examined. “We cannot rule out this kind of a situation in other banks though the issue has not been brought up formally,” the official added.

Meanwhile, the complaints of fraudulent withdrawal are limited to cards of 19 banks and 64 customers with the total amount involved being Rs 1.3 crore, NPCI said. “Necessary corrective actions already have been taken and hence there is no reason for bank customers to panic. Advisory issued by NPCI to banks for re-cardification is more as a preventive exercise.” NPCI CEO, AP Hota said.