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India's City Union Bank finds fraudulent remittances via SWIFT system

India-based City Union Bank Ltd. discovered three "fraudulent" remittances to lenders abroad through the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, payment system.

The bank said Feb. 17 that the remittances were not initiated from its end. The bank also alerted correspondent banks to recover the funds.

One remittance amounting to US$500,000 was made through a Standard Chartered Bank account in New York to a Dubai-based lender, but the transaction was immediately blocked.

A second transfer of €300,000 was made through a Standard Chartered Bank account in Frankfurt to a Turkey-based lender. The money was blocked in the beneficiary's account in Turkey.

The third remittance worth US$1 million was made through a Bank of America account in New York to a Chinese lender, with the beneficiary claiming the funds by submitting forged documents, the Indian bank said.

City Union Bank said it is taking all necessary legal and diplomatic measures to retrieve the funds from China and Turkey, with the help of authorities from the two countries. It added that its SWIFT system is now operational after ensuring a sufficient and enhanced security in place.

Commenting on the incident, CEO N. V. Narayanan Kamakodi said it is "a cyber attack by international cyber criminals," and that they saw "so far no evidence of any internal staff involvement," Reuters reported Feb. 18.

Kamakodi also identified the Chinese lender to which the money was remitted to as Zhejiang Rural Credit Cooperative Union in Hangzhou, China.