Karnataka Bank has taken proactive measures by appointing Pipara & Co. LLP, a Chartered Accountants firm based in Ahmedabad, to conduct a forensic audit. This decision follows the Reserve Bank of India’s (RBI) directives aimed at addressing specific concerns related to the bank’s reconciliation process for certain unverified UPI global transactions.

Context of the Audit

The audit is focused on reviewing identified inconsistencies in the reconciliation process associated with suspicious transactions made via the Unified Payments Interface (UPI). A statement from Karnataka Bank highlighted their commitment to transparency and operational integrity: “Following the directions from the RBI and our Board, we have engaged M/s. Pipara & Co. LLP to conduct a forensic audit of the identified discrepancies in our UPI global transaction reconciliation process.”

Reassurance to Customers

Despite the ongoing audit, Karnataka Bank reassured its customers and stakeholders that normal business operations will continue without disruption. The bank emphasized that “this review will not affect our services in any way. Our operations continue as usual, and customer service remains our top priority.”

Financial Implications

The forensic assessment revealed potential discrepancies leading to an estimated impact of approximately ₹18.87 crores, linked primarily to the reversal of certain cross-border UPI transactions. However, the bank remains confident that this issue has not adversely affected its operational capabilities or customer services.