New Delhi/IBNS: A ransomware attack on an Indian technology service provider has forced payment systems across nearly 300 small local banks in the country to shut down temporarily, Reuters reported, citing two sources directly aware of the matter.

According to reports, the ransomware attack affected C-Edge Technologies, a provider of banking technology systems to small banks across India.

However, neither C-Edge Technologies nor the Reserve Bank of India (RBI) officially commented on the matter.

Meanwhile, in a public advisory issued late on Wednesday (July 31), the National Payment Corporation of India (NPCI), an authority that oversees payment systems, said that it had "temporarily isolated C-Edge Technologies from accessing the retail payments system operated by NPCI."

"Customers of banks serviced by C-Edge will not be able to access payment systems during the period of isolation," the NPCI advisory read.

Reuters reported, quoting its sources, that nearly 300 small banks across India have been isolated from the country's broader payment network to prevent any wider impact.

"Most of these are small banks and only about 0.5 percent of the country's payment system volumes would be impacted," one of the sources was quoted as saying by Reuters.

The sources told Reuters that India has nearly 1,500 cooperative and regional banks which mostly have operations outside big cities, and around 300 of these banks have been hit due to the ransomware attack.

NPCI is carrying out an audit to ensure that the attack does not spread, Reuters reported, quoting its sources.

In the past few weeks, the RBI and the Indian cyber authorities have warned the country's banks about possible cyber attacks, according to media reports.