Hack attack: Leading Indian bank freezes fund transfer requests by email

The State Bank of Travancore, which handles thousands of non-resident Indian accounts, has advised its customers to stop sending fund transfer requests by email, after international hackers reportedly swindled money from accounts of overseas Keralites after hacking into their emails.

“As a preventive measure, the State Bank of Travancore has taken a decision not to act on email instructions for transfer of funds. The bank has advised all its customers to use the Internet banking facility instead of sending email requests for fund transfers,” said Sajeev Krishnan, managing director of SBT.

“As banks in Kerala are flush with NRI funds, especially now when the Indian rupee is at record lows, hackers have been targeting their accounts to fraudulently transfer funds after hacking their emails and sending fund transfer requests,” he added.

The bank, which handles more than 25 per cent of all NRI accounts in Kerala, had a few cases of customer complaints as fraudsters transferred money after hacking into their emails and resending some emails to the bank, requesting fund transfer.  The bank is tight-lipped about the number of customers defrauded through bogus emails.

“We noticed that hackers would take control of email addresses, cut and paste previous communication from the bank customer to the bank for transferring funds, and smartly change the beneficiary’s name and address. A maximum of Indian Rupees 5,00,000 can be transferred per day with just an email. Now this system has been stopped and bank customers are being alerted about potential fraud,” he said.

“Last month, we completely stopped fund transfers based on email requests. Some customers came to us and said they never requested a fund transfer. When we checked the mail, they were smartly cut and pasted from their previous messages for fund transfers,” said the official.

“I have received a couple of emails from the SBT branch, alerting me about fraud and hacking. I have been advised not to send fund transfer requests through emails,” said an NRI customer in Dubai.

According to reports quoting the Reserve Bank of India, banks in Kerala have lost heavily through hacked email accounts in the last five to six years. The maximum number of such cases are from Kochi, followed by Thiruvananthapuram.

Sanjeev was in Dubai to open more branches of the SBT- managed money exchange company City Exchange LLC which opened new branches in Ras Al Khaimah, Abu Dhabi and Al Ain.

He said between Rs120 million to Rs150 million per day used to come into NRI accounts in Kerala, which has now doubled to Rs300 million due to the recent sharp decline of the rupee against the dollar.

City Exchange operates 12 branches in Dubai and the thirteenth branch will be opened in Al Ain, said General Manager Saliamma Skaria.

“From our Dubai representative office, we opened 16,000 new accounts for Keralite expatriates here,” said Sree Prakash S, chief representative of SBT in Dubai.

The bank’s managing director also said SBT is backing out from starting a gold coin distribution plan in collaboration with a Canadian bank, after Indian Finance Minister P Chidambaram urged banks to stop gold imports.

 “We were negotiating with a Canadian bank to implement the scheme. But now we will put the plan on the back burner because the Reserve Bank of India and the Finance Ministry have hinted that permission will not be granted to banks selling gold coins,” the MD said.

 

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