Customers of several co-operative banks and regional rural banks (RRBs) across the country were not able to access payments services like withdrawing cash at ATMs or using UPI due to a ransomware attack at technology service provider C-Edge Technologies.

Around 300 small-sized lenders which depend on C-Edge faced this disruption in retail payments to their customers. C-Edge is a joint venture between SBI and TCS. Other banking services were functioning normally.

The issues are being faced for the last two days after the discovery of a breach of the system at C-Edge. Necessary precautions starting with isolating the C-Edge system had to be taken to protect the larger payments system.

“C-Edge Technologies….has been possibly impacted by a ransomware attack impacting a few of their systems,” the National Payments Corporation of India (NPCI) said in a late evening statement, adding that it had to temporarily isolate C-Edge from accessing the retail payment systems operated by NPCI.

Restoration work is being undertaken on a war footing along with C-Edge Technologies and a necessary security review is in process, it added.

A senior industry official told PTI that a ransomware has been found in the system and isolated, following which a third party audit was conducted. If all goes to plan, the system should be running by Thursday morning or afternoon, he added.

The impacted banks account for less than 1% of the overall payment system volume in the country, the official stressed.

National Cooperative Union of India chairman Dileep Sanghani said nearly 300 banks in India, including 17 district cooperative banks in his home state of Gujarat, that use C-Edge have been experiencing 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," Sanghani, the chairman of Amreli District Central Cooperative Bank, told PTI.

He said banks have been suffering since 29 July and the software company’s officials are calling it a technical fault.