Karnataka Bank Ltd, a private sector lender, has the discovery of deficiencies in its reconciliation process for cross-border Unified Payments Interface (UPI) transactions, leading to an estimated net loss of ₹18.57 crore after immediate recovery. In a regulatory filing on National Stock Exchange (NSE), the bank stated that during a review of suspicious UPI Global transactions, certain reconciliation process deficiencies were identified. However, the bank assured that this issue does not impact its operations or customer service.
The problem stemmed from the reversal of transaction amounts to customers. Karnataka Bank has reported the matter to the Reserve Bank of India (RBI) on February 17, 2025, and has initiated steps to recover the lost amount. Additionally, the bank has implemented enhanced control measures to prevent similar incidents in the future.
In the quarter ending December 2024, Karnataka Bank reported a net profit of ₹283.6 crore, a 14.3% decrease from the ₹331 crore profit recorded in the same period the previous year. The net interest income (NII) for the quarter stood at ₹792.8 crore, a 4.2% decline from ₹827.6 crore reported a year earlier.
Private sector lender Karnataka Bank Ltd announced on Monday (February 17) that it identified deficiencies in its reconciliation process for cross-border UPI transactions, leading to an estimated loss of ₹18.57 crore after immediate recovery.
