Leading Indian Bank to Deploy More than 8,000 Aladdin eTokens

CHICAGO, February 26, 2007 - Aladdin Knowledge Systems Ltd.
(NASDAQ: ALDN), the leader in Software DRM, identity management and content security solutions, today announced that Punjab National Bank (Mumbai NSE: PNB), a 110-year old India-based bank with more than 4,520 branches throughout the country, has selected Aladdin eToken to protect sensitive bank and customer data accessed by its employees

The company has deployed 2,500 eToken smart card devices since November 2006, with another 5,500 slated to be deployed throughout Q2 2007. With a dominating presence throughout India and several thousand employees, Punjab National Bank (PNB) could potentially expand its eToken use to as many as 14,000 smart card tokens in coming quarters.

PNB provides a wide spectrum of services requiring powerful user authentication, including corporate and personal banking, industrial finance, agricultural finance, as well as financing of trade and international banking. eToken initially protects access to four key bank processes, including its Real Time Gross Settlement (RTGS) solution, a settlement solution to enable funds settlement across banks on real time basis; its Structured Financial Messaging System (SFMS), a SWIFT-like Messaging System which serves as a safe, secure communication carrier of intra and inter bank messages; its Multimedia Messaging Service (MMS); and eProcurement.

Aladdin eToken is offered to PNB through Mikroz InfoSecurity Pvt. Ltd, a New Delhi-based Aladdin channel partner, headed by Capt.® Ashok B. Shiroor, MD. Providing strong two-factor authentication, Aladdin eToken requires a person to have both physical possession of the eToken (something you have) together with knowledge of the eToken's associated password (something you know) to use the identity credential stored on the eToken and access sensitive data. About the size of an average house key, the award-winning Aladdin eToken is recognized as one of the world's most innovative, easily used tokens that store credentials within the device itself. eToken offers a water-resistant, highly durable form factor that stands up to constant use - easily carried by PNB employees.

"PNB decided to forgo using traditional smart cards and deploy Aladdin's USB-based eToken, as it offers considerably more ease of use and doesn't require the purchase and management of readers," said Mr. R I S Sidhu, General Manager, Information Technology at PNB. "With such a large, country-wide deployment planned, simplicity, durability and cost-effectiveness were crucial in our decision. Aladdin eToken's proven track record of stellar technology and support are already evident in our initial deployments, and we look forward to expanding our use throughout PNB facilities." Mr. R K Bansal, Dy General Manager, Information Technology, also expressed satisfaction about the cryptographic tokens and informed that this has helped the bank in better security compliance and more so conveniently.

"Punjab National Bank's vast deployment of Aladdin eToken throughout India is yet another example of our fast growth in the region," said Shlomi Yanai, vice president of the Aladdin eToken Business Unit. "The banking industry clearly demands top notch security, reliability and performance when protecting customers' sensitive information. PNB illustrates a growing trend toward arming employees with a simple, yet powerful smart card-based method of proving their identities. We're pleased to name PNB as one of our latest customers in India."

On October 19th, 2006, Aladdin announced its Aladdin subsidiary in Mumbai, led by India country manager Shailendra Sahasrabudhe. The new subsidiary supports Aladdin's consistent, ongoing growth throughout the country, offering customers and partners local support and training.

About Aladdin eToken

Aladdin eToken is the world leader for USB-based authentication solutions. It provides strong user authentication and cost-effective password management solutions enabling organizations to easily and effectively expand business opportunities with secure network access, improve data security through enhanced encryption and digital signing, and reduce costs and vulnerabilities through superior password management. For more information, please visit www.Aladdin.com/eToken

About Aladdin

Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN), founded in 1985, is a global provider of security solutions. Its security products are organized into two segments: Software Digital Rights Management (DRM) and Enterprise Security. Aladdin's Software DRM products allow software developers and publishers to protect their intellectual property, increase revenues through licensing, and reduce losses from software piracy. Aladdin's Enterprise Security solutions enable organizations to secure their information technology assets by controlling who has access to their networks (identity and password management) and what content their users can utilize (proactive content security). Aladdin has offices in 10 countries, a worldwide network of channel partners and holds numerous industry awards for innovation and reliability. For more information, please visit the Aladdin Web site at www.Aladdin.com.

©2007 Aladdin Knowledge Systems, Ltd. All rights reserved. eToken, Aladdin Knowledge Systems and the Aladdin logo are trademarks or registered trademarks of Aladdin Knowledge Systems, Ltd. All other product and brand names mentioned in this document are trademarks or registered trademarks of their respective owners.

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