Retail payment systems at over 300 local banks including cooperative and regional rural banks were disrupted on Wednesday (31 July, 2024) due to a ransomware attack, according to news reports. The ransomware forced shutdown of payment systems at these banks, stopping customers from availing basic services like cash withdrawal at ATMs and UPI payments 

After the attack, the National Payments Corporation of India (NPCI) cut off C-Edge Technologies, a tech firm backed by SBI and TCS from the payment system.

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C-Edge Technologies offers a core banking service that helps small banks manage their operations through an outsourced model. This service connects all their branches, allowing them to handle everything from one central system, which is ideal for banks that can’t afford their own core banking solutions.

In a press release, NPCI said, “It has been brought to NPCI’s notice that C-Edge Technologies Ltd, a technology service provider who caters mostly to cooperative and regional rural banks, has been possibly impacted by a Ransomware attack impacting a few of their systems.”

What is a Ransomware Attack?

A Ransomware Attack is a type of cyberattack where malware encrypts your files, locks you out, and demands a payment in exchange for returning control of your data or device to restore access.

There are different types of ransomware:

Crypto ransomware: It encrypts your files, making them inaccessible, and demands payment in exchange for a decryption key to unlock them.

Locker ransomware: Locks your screen, stopping you from using your device until you pay a ransom.

Double extortion: Encrypts files and threatens to leak sensitive data if the ransom isn’t paid.

In response to this ransomware attack, the National Payments Corporation of India (NPCI) has taken precautionary measures to protect the payment system.

Also Read: RBI Proposes New Rules to Reduce Fraud in Aadhaar-enabled Payment System

“To prevent larger impact to the payment ecosystem, NPCI has temporarily isolated C-Edge Technologies from accessing the retail payment systems operated by NPCI. Customers of banks serviced by CEdge will not be able to access payment systems during the period of isolation,” said NPCI.

Reports say that NPCI is currently auditing the situation to prevent the spread of the attack. Additionally, the Reserve Bank of India (RBI) and Indian Cyber authorities have also warned banks about these cyber threats.

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