ATM card frauds have forced banks to take precautionary measures,
including temporarily shutting down transactions through the national
payment switch (NPS), to safeguard the interests of clients.
The move comes after Eastern Bank on Friday detected 21 suspicious card transactions.
A fraudster with a fake EBL card used one of the ATM booths of United
Commercial Bank Ltd, which sounded off the alarm in UCBL's system.
“We straightaway informed the central bank and the EBL about the
fraud,” said Javed Iqbal, head of communications of UCBL, adding that a
case was also filed with the Banani Police Station on Friday.
EBL shut down operations of all of its ATM booths for six hours on
Friday, said Ziaul Karim, the bank's head of brand and communications.
Subhankar Saha, an executive director and spokesman for the central
bank, said even though it was a bank holiday on Friday all banks were
asked to tighten their security measures at their ATM booths as early as
possible.
“We have asked banks to check their ATM booths to see whether there
is any skimming device to steal the customers' information or not.”
ATM theft is increasingly becoming a common crime, with fraudsters
entering the booths of different banks with fake ID cards and
introducing themselves as IT experts of the banks.
They then install a camera above the ATM machine to record the image
of a cardholder typing the password, or fix a small device to the ATM
card reader to copy the cardholder's information.
Using devices that can write and read cards, the information is then
transferred to a new card with a blank magnetic stripe, according to
bankers. Many banks claim that the use of NPS left their systems
vulnerable to card frauds.
The NPS is the common platform through which electronic payments
originating from different channels like the ATMs, points of sales,
internet and mobile devices, take place.
Of the 56 banks operating in the country, 48 are connected with the NPS, according to Bangladesh Bank.
At present, there are 98 lakh cards that are used in ATM and point-of-sales centres in the country.
“Soon after detecting the fraud on Friday, we have switched off our
NPS line,” said Karim, adding that EBL had written to the central bank
mentioning the risks of the NPS.
“Our own ATM system is on. But we have stopped transactions through
the NPS,” said Abul Kashem Mohammad Shirin, deputy managing director of
Dutch-Bangla Bank that has the largest network of ATM booths in
Bangladesh.
The bank has around 3,000 ATM booths across the country. Some other
banks have also taken similar measures to avert further ATM frauds.
But Prime Bank, which is one of the largest private banks, thinks there is nothing wrong with the NPS.
“This is no way an NPS issue. Fraudsters hacked customers'
information and took away their money,” said Ahmed Kamal Khan Chowdhury,
managing director of Prime Bank. Saha refuted the allegations of
weaknesses in the NPS. “We are continuously upgrading the NPS system and
will keep on doing it.”
He said all ATM booths have CCTV cameras installed in them, through which the banks can monitor the transactions closely.
If the fraudulent activities were taking place due to the banks'
negligence, they have to pay back the customers' money, Saha said.