Hyderabad City Police Cyber Crime Wing’s Efforts Lead to RBI Imposing Monetary Penalty on AP Mahesh Co-operative Urban Bank Ltd. for Cyber Security Non-compliance
Hyderabad, July 1, 2023: In a groundbreaking development, the Cyber Crime Wing of Hyderabad City Police has played a pivotal role in the Reserve Bank of India (RBI) imposing a monetary penalty on AP Mahesh Co-operative Urban Bank Ltd., Hyderabad for flagrant non-compliance with the provisions of the Cyber Security Framework for primary (Urban) cooperative banks.
On January 24, 2022, AP Mahesh Co-operative Urban Bank Limited reported a cyber-fraud incident where a highly sophisticated hacker infiltrated the bank’s systems and fraudulently siphoned off Rs.12.48 crores. The criminal act was executed through a series of deceptive phishing emails sent to the bank’s employees. Upon opening these malicious emails, the employees’ systems were compromised, granting the fraudsters unrestricted access to the bank’s network.
Following the incident, a case was registered (Cr.No.118/2022) at the Cyber Crime Police Station in Hyderabad under various sections of the IT Act-2000 and IPC. Multiple police teams worked diligently to apprehend several culprits, including Nigerian nationals, involved in this sensational case. The investigation also exposed the bank’s negligence in implementing essential Cyber Security measures mandated by the RBI, such as an Anti-phishing application, Intrusion Prevention and Detection Systems, and Real-time Threat Defense and Management Systems.
The absence of these critical Cyber Security components within the bank’s infrastructure highlighted its negligence. Hyderabad City Police Commissioner, CV Anand, corresponded with the RBI Governor, drawing attention to these serious lapses and urging the suspension of the bank’s operating license.
Despite the current legal framework not allowing for criminal negligence charges against the bank management, the City Police pursued the matter rigorously. As a result, the RBI has levied a monetary penalty of Rs.65 lakhs on AP Mahesh Co-operative Bank Ltd.
The RBI’s comprehensive cyber audit, coupled with the police investigation, unveiled significant lapses on the part of the bank, leading to the security breach. This unprecedented action serves as a warning to all banks to adhere to cybersecurity practices to prevent the loss of public funds and vital data.
