In a groundbreaking move, the Reserve Bank of India (RBI) has imposed a fine of Rs 65 lakh on AP Mahesh Cooperative Urban Bank for failing to comply with the Cyber Security Framework for Primary (Urban) Cooperative Banks. Following a thorough cyber audit by the RBI and an investigation by the Hyderabad police, it was discovered that the bank had significant “lapses” that enabled hackers to breach their systems and steal Rs 12.48 crore.
Uncovering the Rs 12.28 crore online robbery
On January 24, 2022, a multi-crore online bank robbery took place at Mahesh AP Bank. The bank reported a cyber theft in which a hacker infiltrated their systems and stole Rs 12.48 crore. The police investigation revealed that the hackers sent phishing emails to the bank’s staff. These emails contained cleverly disguised malware and were designed to deceive the employees. When the employees opened these malicious emails, it granted the cyber criminals full access to the bank’s systems.
It has been reported that the state cyber crime police have arrested six individuals, including two Nigerian nationals, in connection with the Rs 12.48 crore theft.
Findings of the police and RBI investigation
The police investigation uncovered alleged negligence on the part of the bank in implementing cyber security measures. The lapses were serious enough for Hyderabad Police Commissioner CV Anand to write to the RBI governor, calling attention to the critical security flaws. He also requested the suspension of the bank’s operating license.
“Unfortunately, the current legal framework does not allow for criminal negligence charges against bank management. Nevertheless, the city police pursued the matter with the authorities, resulting in the RBI imposing a fine of Rs 65 lakh on Mahesh Bank,” claimed the police commissioner.
According to the police, the bank did not have the necessary cybersecurity infrastructure recommended by the RBI, including measures such as anti-phishing applications, intrusion prevention and detection systems, and real-time threat defense and management systems.
Uncovering the Rs 12.28 crore online robbery
On January 24, 2022, a multi-crore online bank robbery took place at Mahesh AP Bank. The bank reported a cyber theft in which a hacker infiltrated their systems and stole Rs 12.48 crore. The police investigation revealed that the hackers sent phishing emails to the bank’s staff. These emails contained cleverly disguised malware and were designed to deceive the employees. When the employees opened these malicious emails, it granted the cyber criminals full access to the bank’s systems.
It has been reported that the state cyber crime police have arrested six individuals, including two Nigerian nationals, in connection with the Rs 12.48 crore theft.
Findings of the police and RBI investigation
The police investigation uncovered alleged negligence on the part of the bank in implementing cyber security measures. The lapses were serious enough for Hyderabad Police Commissioner CV Anand to write to the RBI governor, calling attention to the critical security flaws. He also requested the suspension of the bank’s operating license.
“Unfortunately, the current legal framework does not allow for criminal negligence charges against bank management. Nevertheless, the city police pursued the matter with the authorities, resulting in the RBI imposing a fine of Rs 65 lakh on Mahesh Bank,” claimed the police commissioner.
According to the police, the bank did not have the necessary cybersecurity infrastructure recommended by the RBI, including measures such as anti-phishing applications, intrusion prevention and detection systems, and real-time threat defense and management systems.
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