Karnataka Bank Flags Rs 18.87 Crore UPI Transaction Reversals

Karnataka Bank reversed Rs 18.87 crore in cross-border UPI transactions after identifying processing issues during reconciliation. The bank notified the Reserve Bank of India, initiated recovery actions, and implemented new controls to prevent recurrence, ensuring no impact on operations or customer service.

Karnataka Bank, a private sector financial institution, has reversed suspicious cross-border UPI transactions totaling Rs 18.87 crore. These transactions could not be completed due to processing issues identified during a reconciliation exercise with the National Payments Corporation of India (NPCI).

In a recent regulatory filing, the bank revealed that its review of UPI Global transactions had uncovered deficiencies in the reconciliation process. As a result, the bank assured stakeholders that these issues have not impacted its operations or customer service.

The incident was reported to the Reserve Bank of India on February 17, 2025. Karnataka Bank has pledged to recover the involved amount and has implemented additional control measures to prevent any future occurrences.

(With inputs from agencies.)