NEPS halts inter-banking transaction within its network

The service provider interface that allows the transaction of money deposited in a bank by using cards issued by other member banks, Nepal Electronic Payment System (NEPS) has halted inter-banking transaction through ATMs within its network after the hacking by Chinese nationals that caused many banks to limit cross banking transactions.
The central bank also confirmed that the NEPS has temporarily stopped the service of cross banking transactions via ATM cards due to the undergoing investigation. NEPS – a common e-payment switching platform of 18 BFIs – has also urged ATM card users within its network to use ATM cards only at their respective banks’ ATM. Likewise, the company – that has been handling electronic payment systems of 11 commercial banks including Prabhu Bank, Machhapuchchhre Bank, Siddhartha Bank, NIC Asia Bank, Prime Bank, Global IME Bank, Sunrise Bank, Janata Bank, Citizens Bank, Bank of Kathmandu, Nepal Bangladesh Bank, and seven development banks including Deva Bikas Bank, Om Development Bank, Sangrila Development Bank, Lumbini Development Bank, Jyoti Bikas Bank, Shine Resunga Development Bank and Excel Development Bank – has also clarified that Saturday’s banking heist has not affected deposits of any customer in any of its member banks.
Likewise, NEPS receives e-payment service from Sunrise Bank and offers service to Sunrise Bank, Machhapuchchhre Bank, Janata Bank, Siddhartha Bank, Citizens Bank, NIC Asia Bank, Bank of Kathmandu, Prime Bank and Nepal Bangladesh Bank.
According to the central bank, two companies – Smart Choice Technologies (SCT) and Nepal Electronic Payment System (NEPS) – have been handling electronic payment systems of a majority of commercial banks in Nepal.
While SCT receives e-payment service from Himalayan Bank, it is offering payment services to Agricultural Development Bank, Civil Bank, Everest Bank, Himalayan Bank, Laxmi Bank, Mega Bank, Nabil Bank and NMB Bank. Global IME Bank and Prabhu Bank use both SCT and NEPS for e-payment services.
Similarly, Nepal Investment Bank provides e-payment service to Nepal Bank, Nepal SBI Bank, Kumari Bank, Century Bank, Sanima Bank, Rastriya Banijya Bank and NCC Bank. Standard Chartered Bank has its own electronic payment systems. Also, five banks – Nepal Investment, Nabil, Himalayan, Standard Chartered and Sunrise – are principal members of Visa.
The Chinese hackers – on Saturday afternoon – tried to steal millions of rupees from several ATMs in Kathmandu using malware attacks. During the malware attack, a proxy switch was created and all the fake payment approvals were passed by the proxy switching system. The hackers used electronic cards of at least six banks – NIC Asia, Siddhartha, Janata, Global IME, Prabhu and Sunrise – and used them at ATMs of three banks – Nabil, Nepal Investment and Nepal SBI – to illegally withdraw the money.
The Chinese hackers had used fake cards to spoof the link of NEPS with the software used by Visa card and software with banks. The cloned card had verified all the details of the bank’s customers on its own and allowed the hackers steal money from the vending machines.
Though, the police have nabbed six Chinese nationals and four Nepalis and recovered approximately Rs 12.63 million, the banks, payment switching provider and the police are yet to determine the exact amount they stole from the ATMs.
The NEPS chief executive officer Prabin Prakash Chhetri said that the hackers had used fake magnetic stripe cards to withdraw the money in the name of Nepali customers. But the money parked by the customers is not affected.
Banks are using both chip-based Europay, MasterCard and Visa (EMV) cards and also magnetic stripe cards for electronic transactions as the ATM machines accept both types of cards, though central bank has been asking the BFIs to change into chip-based cards. Most of the BFIs have also started using the chip-based cards, though the technology is in transition, of which the Chinese hackers took advantage.
Chhetri, however, said that NEPS has hired a forensic expert from Singapore for further investigation. A digital forensic analyst is an expert who explores the causes behind high level cyber crimes. The forensic expert will analyse digital footprints left by the hackers by assessing the server details, user id platform and browser history, among others to collect evidence of possible loopholes.

Gold sets historic record of Rs 70,000 per tola

The precious yellow metal price – that has been rising since the last few weeks – set a new record of Rs 70,000 per tola (11.664 grams) in the domestic market today, as it continued to rise on the sixth consecutive day today.
The price of gold surged by Rs 500 per tola today to reach Rs 70,000 per tola – for the first time in Nepal – confirmed Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida). “The gold price has increased by Rs 4,500 a tola in the last three weeks.”
The hike in gold price in the domestic market is mainly due to rise in the price of the precious metal in the global market. The trade dispute between the United States and China, along with increased tariffs by the US on Chinese goods resulted in investors flocking to gold, which is considered a safe investment, pushing the gold price is expected to rise further. “Government decision to hike import tax on gold has also made gold dearer in the domestic market,” the bullion traders said, adding that the government – through the budget for fiscal 2019-20 – had increased the import duty on gold by Rs 800 per 10 grams. “Thr gold importers now have to pay import tax worth Rs 5,000 per 10 grams, against Rs 4,200 per 10 grams earlier.”
Due to continuious surge in the price, the daily demand of raw gold in the domestic market has gone down to less than 10 kg from the normal market demanded of almost 30 kg of raw gold daily, according to the federation. “Due to falling demand, the commercial banks have also stopped importing gold temporarily.”
According to Nepal Bankers’ Association (NBA), commercial banks have almost 560 kg gold in stock.
With gold prices following a high trajectory, the bullion traders said the value could reach up to Rs75,000 per tola. On Wednesday, gold soared over 2 per cent to break the $1,500 barrier for the first time in over six years.
Similarly, the price of silver has also increased by Rs 15 to reach Rs 825 per tola.

23 local units lack banks

Some 23 local units are still devoid of a bank branch despite the central bank dictate to establish a branch of commercial banks in each of the 753 local bodies.
Commercial banks have opened their branch offices in 730 local units as of now, out of the total 753 units, according to the central bank.
Though it has been over two years since the country went into a federal structure, there are still 23 local bodies without commercial banks that can work as treasury of the local governments. As each of these local governments has their own consolidated fund, a branch of commercial bank is needed to operate such fund, according to the central bank. In the absence of the bank branch, local unit officials have to travel to far-away district headquarters for bank-related works. 
While the 28 commercial banks have divided the local units, themselves, for establishing branches two years ago, bankers said that lack of basic infrastructure including buildings, internet connectivity, road, electricity and security have delayed in reaching all the local bodies across the country, though the local governments have shown their commitment to help banks in setting up their branches.
The central bank has offered various incentives and facilities to encourage banks to open their branch in line with the government’s policy to have presence of commercial bank in each local unit. The central bank also provides interest-free loan of Rs 10 million per branch for one year to those banks establishing branches in the designated local levels. Likewise, the banks will also enjoy their monopoly in the local units where they reach first.