Canara Bank steps up cyber checks, tech spend after Bank of Baroda breach

Canara Bank, India’s fourth-largest public sector lender by assets, has initiated a review of its cybersecurity architecture following a recent fraud incident at a peer state-run bank.

The Bengaluru-headquartered lender, which has more than 10,000 domestic branches, is reassessing its systems and stepping up investments in technology as cyber threats grow more sophisticated, managing director and chief executive officer Brajesh Kumar Singh told Mint in an interview.

“We are in the trust business. Trust takes years to build and only minutes to lose. Protecting customer confidence is our foremost priority. Everybody in the banking industry will be reviewing their systems after such an incident. We will also review ours,” he said, adding that the bank’s chief information security officer (CISO) would examine the developments and assess whether any additional safeguards were required.

Singh said cyber risks have become more dynamic with the increasing use of artificial intelligence (AI) by malicious actors, making continuous upgrades essential. “We have adopted best-in-class solutions wherever required. Our Security Operations Centre (SOC) and Network Operations Centre (NOC) function round the clock, but cybersecurity is a daily exercise. Banks have to remain constantly vigilant,” he said.

Canara Bank has earmarked more than ₹2,000 crore towards information technology and cybersecurity initiatives, according to Singh.

His comments come in the wake of a cyber breach at Bank of Baroda that reportedly exposed about 1 terabyte (TB) of customer and internal data following a compromise of an employee’s email account. The leaked files include branch audit reports, loan appraisal files, vigilance records and customer account-opening forms, among other documents circulating online. The state-run lender said its core banking systems were not accessed and has launched a forensic investigation.

In April this year, finance minister Nirmala Sitharaman asked banks to prioritise strengthening their cyber defences, promptly report suspicious digital activity, and engage top cybersecurity experts amid concerns over emerging risks linked to recent advances in artificial intelligence. Chairing a high-level meeting with scheduled commercial banks and key stakeholders, Sitharaman said the evolving threat posed by the latest AI models was unprecedented and required a high degree of vigilance, preparedness, and stronger coordination across financial institutions.

Canara Bank expects to raise $2.3-2.5 billion through a combination of Foreign Currency Non-Resident (Bank), or FCNR(B) deposits, External Commercial Borrowings (ECB) and Overseas Foreign Currency Borrowings (OFCB). Of this, around $1.5 billion is targeted through FCNR(B) deposits before the Reserve Bank of India’s special window ends on 30 September. The bank has already mobilised around $775 million under FCNR(B) and expects collections under the incentivised dollar deposit scheme to cross $1 billion by the end of July, Singh said.

Canara Bank has raised its provision coverage ratio to around 95% while also making additional provisions ahead of the eventual transition to the expected credit loss (ECL) framework. The lender has also provided around ₹300 crore towards performance-linked incentive (PLI) liabilities.

“The provisions we are creating today will strengthen the balance sheet going forward,” Singh said.

The bank recovered around ₹2,300 crore during the first quarter (April-June) and continues to target recoveries of about ₹11,000 crore in FY27.

Singh said most large legacy corporate stressed assets had already been transferred to the National Asset Reconstruction Company Ltd. (NARCL), with recoveries now largely coming from smaller accounts.

Canara Bank expects its gold loan portfolio to grow 20-25% during FY27, with Singh saying the lender remains fully compliant with the Reserve Bank of India’s revised gold loan guidelines.

“We are market leaders in gold loans and do not see any significant challenge there,” he said.

The bank’s board has approved raising up to ₹8,500 crore through capital instruments as an enabling resolution, including ₹4,500 crore via Additional Tier-I bonds and ₹4,000 crore through Tier-II bonds. The timing of the issuance will depend on market conditions, Singh said.

Canara Bank had a global business of ₹29.05 trillion as of 30 June 2026, comprising global deposits of ₹16.12 trillion and gross advances of ₹12.93 trillion. The lender posted 14.37% year-on-year growth in global business, driven by 17.97% growth in advances and 11.63% growth in deposits. Retail, agriculture and MSME credit now accounts for nearly 59% of the loan book, with retail loans growing 35.88% year-on-year.