Banking sector chaos paralyse business

—as interbank payments remain stalled

Moroke Sekoboto

Business in Lesotho has virtually ground to a halt as the country’s banking system remains paralysed after the Central Bank of Lesotho was hacked earlier this week.

Banking executives have been locked in meetings to try and find a way forward. It had been suggested the banking sector could revert to an old system of processing transactions manually but that seems to have presented its own challenges.

As of now, Lesotho’s international and interbank payment transactions remain offline. Balances of accounts for businesses and individuals remain stagnant.

Some businesses are now withholding services as they require payments to reflect in their accounts first before rendering work.

“I got a proof of payment of 177 000 from one of my clients on Monday. The money hasn’t yet reflected in my account….,” said a frustrated business executive who preferred to remain anonymous.

“I am now severely stranded…..I wish the central bank and the commercial banks could give us regular updates on what is happening….. We can’t go on like this….Vigorous and regular communication is essential in situations like this.”

The Lesotho Times understands that the CBL has roped in South African cyber expects to try and resolve the problem.

Unless a solution is found soon, it could be a bleak festive season for many Basotho. Already the interbank transfer system is now clogged with a backlog of payments which will need to be cleared first. Employers will be unable to pay salaries and individuals cannot transfer cash to one another.

The CBL and Bankers Association of Lesotho (BAL) issued a statement last night on the National Payments System Downtime, acknowledging the ongoing chaos that have made it impossible for all local banks to honour inter-bank transactions in the country.

“Technical teams from the Central Bank of Lesotho as the regulator and the banking industry as a whole are working tirelessly to resolve the issue and the nation will be notified as soon as the system is back in operation,” read the statement.

“The CBL and BAL Members have now agreed to institute business continuity processes and measures as alternative ways to facilitate payments and transactions between all banks. The Central Bank of Lesotho will continue to update all Basotho and users of the financial payments system on these developments.”

The CBL initially confirmed that it experienced a “cyber-security incident” on Monday this week but did not detail the nature of the attack.

“The Bank has investigated the matter and is working around the clock to restore the systems and wishes to assure the public that it has not suffered any financial or other loss,” the CBL said.

The bank further said it had suspended some of its systems to prevent further infiltration, adding that as consequence, some payments might be delayed as the bank frantically worked on restoring its systems.

Meanwhile, commercial banks operating locally have since stopped inter-bank transfers and payments until the matter is resolved, and have as a result issued the following statements:

Please be advised that local payments (that is, payments from FNB Lesotho to other local banks AND payments from other local banks to FNB Lesotho) are currently not being processed.

The challenge is being attended to and an update will be provided once it has been resolved and services restored.

Kindly note however, that payments from FNB Lesotho accounts to and from other FNB Lesotho accounts have not been impacted.

Please be advised that all efforts are being made to resolve the downtime of the National Payment System so that your inter-bank transfers can resume. The technical teams are working tirelessly to restore the service.

Other transactions to foreign banks as well as Standard Lesotho Bank to Standard Lesotho Bank are still available. Please take note of the official communication below issued by the Central Bank of Lesotho on the matter.

Nedbank Lesotho

With reference to the official statement issued by CBL on Monday in relation to a cyber security incident experienced on the CBL’s system affecting local inter-bank payments and transfers, Nedbank Lesotho wishes to assure clients, stakeholders, and the public, that appropriate measures have been taken to safeguard against the impact of the cyber security incident, in close engagement with the CBL and other industry stakeholders.

Subsequently, the industry shall continue to collaboratively solve for affected local bank payments transactions. This may lead to a slower fulfilment owing to manual interventions as we aim to ensure safe transactions.