Ransomware Disrupts Payment Systems for 300 Small Banks in India

A report has revealed that India’s small banks have been hit by a ransomware attack, making nearly 300 lenders go offline.

The attack targeted C-Edge Technologies, a main provider of banking technology. This event has cut these banks off from the larger payment network, making it hard for them to process transactions.

In response, the National Payment Corporation of India (NPCI), which manages payment systems in the country, recently delivered a public message. The entity said it had temporarily cut off C-Edge Technologies from using the retail payments system they operate. This step is to stop the attack and prevent it from spreading to other parts of the payment network.

Nearly 300 Small Banks Have Been Disconnected From The Payment Network

The advisory stated that customers of banks served by C-Edge will not be able to access payment systems during the isolation period.

The isolation is a precaution to prevent any wider impact on the nation’s payment system. Officials from a regulatory authority said nearly 300 small banks, mostly located outside major cities, have been disconnected from the payment network.

Even though there was a disruption, the overall impact on India’s payment system remains small. Officials said the affected banks only make up about 0.5% of the country’s payment system. India has around 1,500 regional banks and cooperatives, most of which are outside major cities. The affected banks are just a small part of these.

The NPCI Seeks To Safeguard The Integrity Of The Payment System

The NPCI is conducting a careful check to make sure the ransomware doesn’t spread any further. This step is to protect the whole payment system. Recently, Indian cyber authorities and the Reserve Bank of India (RBI) warned banks about the rising risk of cyberattacks.

Both the Reserve Bank of India and C-Edge Technologies haven’t spoken on the issue or responded to requests for information. This silence has left many questions unanswered and increased worry among the affected institutions and their customers.

According to a report from the International Monetary Fund in April, the financial industry lost $12 billion over the past 20 years because of more than 20,000 cyberattacks. This rise in attacks is said to be linked to increased digitalization and geopolitical tensions.

Since the COVID-19 pandemic, the number of cyberattacks on financial firms has doubled. Direct losses for companies in the sector have also increased significantly, more than quadrupling since 2017 to reach $2.5 billion.