Software Issue Halts Online Transactions at Cooperative Banks Across India

A software glitch has disrupted online transactions for nearly 300 banks, primarily in the cooperative sector, across India over the past three days, officials in Gujarat reported on Wednesday. The National Payments Corporation of India (NPCI) suggested it might be a ransomware attack and has temporarily isolated the affected software from retail payment systems while restoration efforts are ongoing.

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Jyotindra Mehta, chairman of the Gujarat Urban Cooperative Banks Federation, confirmed that a virus was detected and removed from the software. "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.

Impact on Cooperative Banks

Dileep Sanghani, chairman of the National Cooperative Union of India, stated that online transactions for at least 17 district cooperative banks in Gujarat, including the Amreli District Central Cooperative Bank (DCCB), were impacted due to issues with C-Edge software. According to C-Edge's website, it is a joint venture between Tata Consultancy Services Ltd (TCS) and State Bank of India (SBI).

Mangilal Bahediya, CEO of Ahmedabad District Cooperative Bank, mentioned that the software was shut down nationwide following a cyber attack attempt. "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.

Technical Faults and Restoration Efforts

B S Kothiya, manager of Amreli DCCB, indicated that the software would be operational 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.

Sanghani also noted that banks have been experiencing problems since July 29. "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," he added.

Broader Implications

Nearly 300 banks in India, including 17 district cooperative banks in Gujarat using this software, have faced 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 Sanghani.

Mehta explained that although few banks in Gujarat use this software, GSC Bank does and provides clearing facilities to nearly 140 cooperative banks. "Thus, if GSC bank's software is shut, dependent banks' online payment systems also stop working," he added.

The NPCI has taken steps to isolate the problematic software from accessing retail payment systems temporarily while restoration work continues at full speed.

The situation remains under close watch as authorities work towards resolving these technical issues swiftly to restore normal banking operations across affected institutions.