Telangana Cyber Bureau Alerts Financial Firms Over AI-Driven Payment Frauds

Cyber Threat Alert

The Telangana Cyber Security Bureau has warned banks, fintech platforms and non-banking financial companies about rising AI-assisted cyberattacks on payment systems and loan disbursement platforms. Officials issued this warning during a meeting at the TGCSB headquarters in Hyderabad on Thursday, November 12. Representatives from the Reserve Bank of India, the Department of Telecommunications and the Indian Cyber Crime Coordination Centre attended the session. TGCSB Director Shikha Goel addressed the meeting, while Rushi Mehta of the I4C led discussions online regarding payment APIs and safety measures.

How Attacks Work

Fraudsters are mainly targeting smaller financial institutions that have weaker cybersecurity systems. Attackers spend ten to twelve days studying internal processes and payment setups to find whitelisted IDs, API credentials and code flaws. They use stolen credentials from trusted servers to make fraudulent requests look genuine. Automated scripts then trigger payout requests outside normal batch windows, split payments into smaller amounts, and repeat transfers to bypass fraud alerts. The stolen money quickly moves into mule accounts through automated bulk transactions before anyone can stop the transfers.

Prevention and Rules

Financial institutions must stop waiting to report fraud only after it happens and should instead block fraudulent transactions right at the source. The TGCSB recommends running regular vulnerability and penetration tests, securing APIs, and using real-time fraud detection systems alongside transaction velocity checks. If an attack happens, institutions should immediately shut down automated loan disbursement software, switch to manual operations, freeze accounts and clear pending API calls. Automated systems should only turn back on after a cybersecurity team tests them and fixes all flaws. Victims must report fraud through the 1930 helpline or cybercrime.gov.in, alert beneficiary banks and I4C, report incidents to CERT-In within six hours, and update the RBI through the DAKSH portal.

Context

Financial institutions face growing digital security risks as more lending and payment services shift online. Authorities like state cyber bureaus and national agencies often coordinate with banks to set safety standards and share threat intelligence.