In a major slip, UCO Bank has erroneously transferred Rs 820 crore to some of its account holders due to a technical issue in the Immediate Payment Service (IMPS).

Initiating a reversal process, the state-owned bank has been able to recover around Rs 649 crore or 79% of the amount erroneously credited.  

“The bank has initiated requisite actions to recover the balance amount of Rs 171 crore and the matter has also been reported to the law enforcement agencies for necessary action,” the Kolkata-headquartered lender said.

During the period from November 10 to 13, the bank observed that due to technical issue in IMPS, certain transactions initiated by holders of other banks have resulted in credit to the account holders in UCO Bank without actual receipt of money from these banks. Money is instantly transferred in the IMPS system from one account to another account.

“The bank, as a precautionary measure, has made the IMPS channel offline and is working closely with the stakeholders to resolve the issue and restore the IMPS services at the earliest,” it said.

The state-owned bank has not clarified whether this technical glitch was due to human error or a hacking attempt.

In a regulatory filing on Thursday, UCO Bank said it could recover Rs 649 crore by blocking the recipients' accounts.

The IMPS platform is operated by National Payments Corporation of India (NPCI). It is a real-time interbank electronic funds transfer system that happens straight without intervention.

“The bank re-iterates and assures that all other critical systems are operational and available. The bank continues to provide safe and secured services to customers,” it said.

The financial impact, if any, due to the development is yet to be ascertained and the bank will endeavour to intimate the ascertainment, the bank said.

Two months back, Tamilnad Mercantile Bank wrongly credited Rs 9,000 crore into a taxi driver's account. Subsequent to that, the private lender's managing director and CEO S Krishnan resigned from the post.