Hit by system hack, Indian health ministry stops fund transfers to states

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Health Minister JP Nadda attending population workshop
Health Minister JP Nadda attending population workshop

The fund transfer system used by health ministry has been compromised; an FIR has been lodged

Fund transfers from the health ministries to states and various central and state government agencies have stopped since Wednesday after it came to light that the Public Finance Management System (PFMS) used for these transactions had been hacked and funds fraudulently transferred to unauthorised accounts. All the ministry accounts have been frozen and passwords are in the process of being changed.

Delhi Police has lodged an FIR after the official from whose computer the fraudulent transaction is suspected to have been done, reported the matter. So far a misappropriation of Rs 2.5 crore has been detected but officials are not ruling out the possibility of more fraudulent accounts having been created. Initial suspicion is that the money went to an account in Assam. That is why till all processes have been checked, fund transfers have been put on hold. Bills are cleared on a daily basis through PFMS and states are funded for various schemes depending on utilisation and requirement on a daily basis.

Delhi Police has lodged an FIR after the official from whose computer the fraudulent transaction is suspected to have been done, reported the matter. So far a misappropriation of Rs 2.5 crore has been detected

Health being a state subject, almost all expenditure of the health ministry happens through states with the exception of central agencies like NACO. However for the time being all transactions have been stopped, including to affiliate agencies within the central government. Some rooms have been closed and some computers are being checked to ensure no more embezzlement can happen. officials are tight-lipped about insider involvement but are not ruling it out as yet.

Explained an official, “PFMS is used to make all payments to vendors, contractors, states and central agencies. Normally funds are transferred only to verified accounts. In this case it seems an account was created and the backend verification fraudulently done so that the money could be transferred. We are not on a position to give out anything more at the moment. We are working hard to bring things back to normalcy as soon as possible.”