Bug Took Crores! MobiKwik Suffers Massive Financial Loss Due to App Glitch

One MobiKwik Systems told investors it was defrauded of about ₹40.2 crore after some registered merchants and colluding users exploited a technical fault in the company’s app that marked failed transactions as successful.

The firm has filed an FIR with Gurugram police, six people have been arrested, and law-enforcement agencies have frozen about 2,500 bank accounts linked to the transfers. The company says it has recovered roughly ₹14 crore so far, leaving an estimated net impact of ₹26 crore.

The suspicious activity was detected on September 11–12, 2025, prompting MobiKwik to alert Gurugram police on September 12, 2025; an FIR was filed on September 13.

Investigators say a bug in the mobile app caused some transactions to appear as successful even when payments had failed, enabling certain merchants to claim unauthorised settlements and route funds into many bank accounts.

Police action includes arrests of six people from Nuh and Palwal districts and temporary freezes and liens on accounts that received the credits (police said frozen balances total about ₹8 crore).

Company Disclosures & Market Reaction

MobiKwik’s stock fell after the disclosure (the company’s filing noted a share decline of around 3.2% at one point). Management has told regulators the incident involved merchants and external users in limited locations and that no employees or insiders are implicated. The firm said it is pursuing legal and recovery steps to reclaim the remaining funds.

During interrogation the accused reportedly confirmed they exploited the app glitch to route funds into thousands of bank accounts. The six suspects were produced before a local court and remanded to judicial custody while investigations continue. Police and MobiKwik have been running outreach to affected account-holders in neighbouring districts.

The case highlights operational and fraud risks for payment platforms: small technical faults at scale can be weaponised quickly, producing large direct losses and regulatory, reputational and customer-remediation costs.

For MobiKwik, which offers wallets, UPI and payment-gateway services and has been coping with wider business challenges, the incident adds near-term financial and compliance strain.