PNB fraud: IT glitches hit Punjab National Bank’s core banking, ATMs

MUMBAI: As if dealing with the Rs 13,000-crore Nirav Modi fraud wasn’t enough, Punjab National Bank (PNB) has been facing technology-related issues with its core banking solution and ATM operations, said two people aware of the matter. The core banking system, which was upgraded recently, caused problems in the state-owned lender’s branch operations, people aware of the matter said. The system was upgraded to Finacle 10, an Infosys product.

“Infosys usually takes at least 90 days to upgrade the solution and was asked to do so in about 45 days. As a result, the core banking solution is unable to function seamlessly and is creating problems,” a person involved with the matter said.

PNB’s core banking solution was at the core of the scam. Officials of the bank’s Brady House branch in Mumbai are said to have fraudulently issued letters of undertaking to companies belonging to the Nirav Modi Group for availing of buyers’ credit from overseas branches of Indian banks. These transactions were not captured by PNB’s core banking solution and could not be detected early.

People also pointed out that some of PNB’s 10,000-plus ATMs faced glitches after it changed the switch solution provider to FIS from ACI Worldwide. “The bank moved to the FIS platform at the last moment as it failed to renegotiate the contract with ACI Worldwide,” one of the people said. “In the first week of March, about 40% of the PNB ATMs on the FIS network were down but now things seem to have normalised.”

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IT glitches hit Punjab National Bank’s core banking, ATMs

The migration involved 90 million cards, 10,000-plus ATMs, five subsidiary banks, 23 interfaces, MasterCard and Rupay schemes and various other functionalities, PNB sources said. The switchover was completed in a record eight weeks, they said. PNB sources said all technical glitches will be resolved soon and normal operations will be restored.

“We are upgrading our core banking to Finacle 10 from Finacle 7 and that started about a month ago. Whenever there is technological upgrade, there will be some disruption, but whatever we faced was at the initial stage. We process so many different kinds of transactions at the branch level… there are some teething issues but it has almost stabilised… we are no longer facing issues with ATMs. We are aiming that in the next 10 days everything will be normalised,” a senior PNB official said on condition of anonymity. PNB, Infosys and FIS did not respond to emails from ET seeking comment on the matter.

The bank said on February 13 that the core banking software was being upgraded and that testing has been going on from January 29.

“It is a superior system and would enable the bank at mid-office and head office to view transactions of all branches through one administration… Need-based access is available for authorised users at various levels based on user profile to view transactions of a required branch or a group of branches and related MIS (management information system) as required, the bank had said in a statement.

Several private sector banks are using Finacle 10, while among stateowned lenders, Indian Overseas Bank and Bank of Baroda were among the earliest to use the solution.