Software glitch' halts online transactions of cooperative sector banks

A software issue has affected online transactions of nearly 300 banks, mostly in the cooperative sector, across India for the last three days, officials in Gujarat said on Wednesday. In a separate statement, the National Payments Corporation of India (NPCI) termed it a possible ransomware attack. 

It has temporarily isolated the software in question from accessing retail payment systems, and restoration work is underway on a war footing, it said. 

Chairman of the National Cooperative Union of India Dileep Sanghani said online transactions of at least 17 district cooperative banks in Gujarat, including the Amreli District Central Cooperative Bank (DCCB), were affected due to the issue in 'C-Edge' software. 

According to the website of C-Edge, it is a joint venture between Tata Consultancy Services Ltd (TCS) and State Bank of India (SBI). 

"The software company officials are saying it's a technical fault. Banks have been suffering since July 29. We are given an assurance that a solution will arrive by today evening. So we are waiting," said Sanghani, chairman of Amreli DCCB. 

"Nearly 300 banks in India, including 17 district cooperative banks in Gujarat, which have installed this software, have been experiencing issues for the last two-three days. All online transactions, such as RTGS and UPI payments, are affected. Money is deducted from the sender's account but does not get credited in the receiver's account," said the former state minister. 

Mangilal Bahediya, CEO of the Ahmedabad District Cooperative Bank, said the software has been shut across India following a `cyber attack'. 

"There was an unsuccessful attempt to hack the software and as a precautionary measure, online transactions have been stopped. Banks which are using that software are affected due to this technical issue. There is nothing to worry and we have learnt that RBI will bring a solution very soon," said Bahediya. 

Jyotindra Mehta, chairman of the Gujarat Urban Cooperative Banks Federation, said a virus has been detected and removed from the software. Mehta is also on the board of the Rajkot Nagarik Sahakari Bank. 

"Our bank is not using C-Edge, so there is no effect here. A virus has been detected and removed from the software. It is learnt that RBI will give its green signal to use this software by tomorrow morning after getting a third-party inspection certificate from the software firm," he said. 

"There are very few banks which use this software in Gujarat. But, GSC Bank, which is the apex bank, uses this software and provides clearing facility to nearly 140 cooperative banks. Thus, if GSC bank's software is shut, dependent banks' online payment systems also stop working," he added.

According to B S Kothiya, manager of Amreli DCCB, the software will be online by Wednesday night.

"I just had a talk with officials of TCS and RBI in Mumbai and I was told that the software will be online by tonight. This is a national issue. As a precautionary measure, software has been shut after the issue was detected on Monday, which affected the online services. We have already sent SMS to our customers about this issue and asked them to have patience till the system becomes operational," he said.