Suspicious cross-border UPI payments trigger forensic audit at Karnataka Bank
This issue, reported in February 2025, involved the reversal of cross-border UPI transaction amounts, which led to an estimated impact of Rs. 18.87 crore.
Karnataka Bank has appointed external forensic auditors to review suspicious cross-border UPI (Unified Payments Interface) transactions.
The forensic auditing firm, Pipara & Co. LLP, Chartered Accountants, based in Ahmedabad, has been tasked with investigating the matter.
This issue, reported in February 2025, involved the reversal of cross-border UPI transaction amounts, which led to an estimated impact of Rs. 18.87 crore.
In response to the findings, the Reserve Bank of India (RBI) was informed about the matter. The bank assured that the issue would not affect day-to-day operations or customer services. "It is reiterated that the incident reported earlier or the forensic audit being initiated have no impact on the operations of the Bank nor on customer servicing," the bank stated in the April 16 filing.
Cross-border UPI is enabled through collaborations between the National Payments Corporation of India (NPCI) and international partners, including banks, payment networks, and central banks in other countries.
The service enables Indian travelers, students, and expatriates to make payments or receive remittances instantly and at lower costs compared to traditional methods. The move towards cross-border UPI began in the early 2020s, with strategic partnerships and pilot projects.
PhonePe became the first Indian fintech platform to support cross-border UPI payments, allowing users to pay at merchant outlets in the UAE, Singapore, Nepal, and Bhutan using local QR codes.
Cross-border UPI is now accepted in countries such as Singapore, France, Bhutan, Nepal, Mauritius, Sri Lanka, and is being piloted or planned in others, including Oman, Peru, Namibia, and several Southeast Asian nations.
Edited by Affirunisa Kankudti