Cash stolen; HBL, NIC, Ace block debit cards

KATHMANDU, JAN 05 -

Himalayan Bank Limited (HBL), NIC Bank and Ace Development Bank have blocked use of their debit cards for the time being after a few millions of rupees were stolen from HBL through their fraudulent use.

Issuing a joint notice on Friday, the three banks announced that they were upgrading their security system and asked depositors to change the pin codes of their debit cards with an improved security feature. They said that they had blocked the use of their debit cards to improve their card security system.

HBL is a member of global card service giant Visa while NIC and Ace are associate members through HBL. After the theft at HBL, the other banks got together to improve the security features of their cards.

“Changing the pin code is a precautionary measure after the withdrawal of money from the accounts of HBL depositors by third parties,” said Sashin Joshi, CEO of NIC Bank. He added that the bank’s debit cards could be used from next week after the bank starts distributing new pin codes. NIC has 50,000 debit card users. Joshi said that they would change the pin codes of all their ATM cards.  

According to HBL, there is no threat to ATM cards issued after May 2012 as they have improved security features. It said the bank started its security system as per the improved version of Payment Card Industry Data Security Standard (PCI DSS) which will block any hacking attempt on the card’s security system.

HBL CEO Ashok Rana said there were less than 50,000 ATM cards issued before May 2012 which have the older version of security features. HBL on Thursday informed its depositors it was going to change all the debit cards issued before May 2012 while it would change the pin codes of cards issued after May 2012.

Rana said that the bank would complete printing pin codes for all the ATMs by Sunday and distribute them to enable card holders to withdraw money. HBL said that they spent around Rs 40 million to upgrade the security system of the cards.

Meanwhile, Ace said that they would have to change about 9,000 ATM cards which were issued before May 2012. The development bank has issued around 20,000 such cards, it said. “Being an associate visa member through HBL, we had to be alert and take pre-emptive measures to stop fraud,” said ACE CEO Siddhant Raj Pandey.

Although KIST, the Bank of Kathmandu and NMB Bank are also associate members of Visa through HBL, Rana said they need not worry about their accounts being hacked as they are newer associate members and they have Visa’s improved security features.

Meanwhile, HBL has been investigating the unauthorized withdrawal of money from its accounts through debit card fraud. HBL CEO Rana said they had collected CCTV video of suspected people who could have withdrawn money from a few places in Nepal and had also asked Visa to investigate the withdrawal from New Delhi.

The bank has suspected that the money was withdrawn from New Delhi. “As the money was withdrawn by hacking the Visa system, we have sought its help in investigating the theft and recovering it,” said Rana.

Meanwhile, Nepal Rastra Bank is also concerned about the recent incidents of fraud using debit cards . Central bank spokesperson Bhasmani Gnawali said that banks should strengthen the security system regarding cards so that money cannot be withdrawn using another debit card. “The security system in cards has improved a lot, but it should be further improved,” said Gnawali.

Source: The Kathmandu Post