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Bank Muscat uncovers travel cards fraud case worth OMR15 million
February 25, 2013 , 9 : 59 pm GST
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: Bank Muscat, the Sultanate's biggest bank, yesterday said its 12 travel cards were compromised in a single day on February 20, with a total tran-saction value of OMR15 million.
These transactions originated from outside Oman, the bank said in a major stock market disclosure that affected its share prices.
"No customers have suffered any financial loss and no other credit or debit cards issued by Bank Muscat have been affected. The bank is working with all stakeholders to further investigate and to establish any losses arising from these transactions," the statement added.
Experts in bank card operations in Oman said the fraudsters must have bought the travel cards and duplicated them several times to use them from multiple locations outside the country. They might have managed to penetrate the database of the bank to use the cards from at least 10 to 15 locations on a single day.
In fact, an India-based company manages the travel card database of Bank Muscat and several other banks in Oman as well as leading institutions based in India.
The international mafia must have infiltrated into their system using duplicate cards and the system did not suspect the authenticity of the user. Several banks have hired this Indian firm for managing card platform operations.
Bank Muscat shares slid 4.26 per cent, the most since July 11, to 607 baisas on the Muscat Securities Market (MSM), after the news spread in the market.
The bank was the second leading loser yesterday and about 6.1 million shares were traded, almost five times the three-month daily average. The benchmark MSM30 Index fell 0.5 per cent.
A Bank Muscat official said in another statement that the bank is investigating the matter.
"The bank is committed to transparency and in line with the best corporate governance and compliance practices, made the disclosure on MSM informing about the compromise of 12 Bank Muscat prepaid travel cards. The bank as mentioned in the disclosure is investigating the matter. On detection of the development, the bank launched immediate action and business relating to all operations, especially credit and debit cards, continues as normal," noted the official.
"The bank has a strong system in place to address such developments. No customers are affected from this development and transactions relating to the bank's debit and credit cards are also not affected.
"The bank is the leading financial institution in Oman and enjoys strong financial strength and this incident will not affect the growth of the bank. We reiterate that this is an isolated incident which has not affected the bank's debit and credit card operations," added the official statement.
Profit rises 18%
Bank Muscat last month reported an 18 per cent increase in annual profit to OMR139.2 million. The lender's impairment charges for bad loans rose 3.2 per cent last year to OMR57.9 million.
Bank Muscat's profit in 2013 is forecast to rise 10 per cent to OMR153 million, according to the mean estimate of nine analysts compiled by Bloomberg.
The shares are rated a buy by 11 analysts and a hold by two.
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