Supreme Court: Issues of Party Capacity and Maintainability Must Be Decided by Arbitral Tribunal  ||  Supreme Court: Omissions in Chief Examination Can Be Rectified During Cross-Examination  ||  Supreme Court: Items Given by Accused to Police Are Not Section 27 Recoveries under Evidence Act  ||  Gujarat High Court: Waqf Institutions Must Pay Court Fees When Filing Disputes in State Tribunal  ||  Allahabad High Court: Law Treats All Equally, State Cannot Gain Undue Benefit from Delay Condonation  ||  SC: SARFAESI Act Was Not Applicable in Nagaland Before its 2021 Adoption, Dismisses Creditor’s Plea  ||  SC: Lis Pendens Applies To Money Suits on Mortgaged Property, Including Ex Parte Proceedings  ||  Kerala HC: Civil Courts Cannot Grant Injunctions in NCLT Matters and Such Orders Can Be Set Aside  ||  Bombay High Court: Technical Breaks to Temporary Employees Cannot Deny Maternity Leave Benefits  ||  NCLAT: Appellate Jurisdiction Limited to Orders Deciding Parties’ Rights, Not Procedural Directions    

RBI directs banks to link SWIFT (Society for World Interbank Financial Telecommunication System Platform) with Core Banking Solutions (CBS) - (20 Feb 2018)

Banking

In order to mitigate the incidence of fraud, RBI mandated the banks to implement, within the stipulated deadlines, the prescribed measures for strengthening the SWIFT operating environment in banks. Banks are required to link the SWIFT (Society for World Interbank Financial Telecommunication System platform) — a global financial messaging service with the core banking solutions (CBS) of banks by April 30, 2018. SWIFT headquartered in Belgium, is a global member-owned cooperative and the world’s leading provider of secure financial messaging services. It provides a platform for messaging, standards for communicating and offers products and services to facilitate access and integration; identification, analysis and regulatory compliance. The Reserve Bank of India has granted approval to SWIFT India Domestic Services Private Limited (SIDSPL) to provide messaging services for domestic financial transactions in India in the year 2016.

PNB fraud occurred as a result of non-linking of the SWIFT system and CBS due to which PNB scam escaped tighter scrutiny. Reserve Bank of India (RBI), has been issuing necessary instructions to banks from time to time on a variety of issues of prudential supervisory concern, including the management of operational risks inherent in the functioning of banks. RBI had, therefore, confidentially cautioned and alerted banks of such possible misuse, on three occasions since August 2016, advised them to implement the safeguards detailed in the RBI’s communications, for pre-empting such occurrences. Banks have, however, been at varying levels in implementation of such measures.

Further, in view of large divergences observed in asset classification and provisioning in the credit portfolio of banks as well as the rising incidence of frauds in the Indian banking system, RBI has decided to constitute an Expert Committee under the chairmanship of Shri Y H Malegam, a former member of the Central Board of Directors of RBI, to look into the reasons for high divergence observed in asset classification and provisioning by banks vis-à-vis the RBI’s supervisory assessment, and the steps needed to prevent it. There is an urgent need to keep a check on increasing incidence of frauds in banks and the measures (including IT interventions) needed to curb and prevent it. Various types of audits need to be conducted in banks so as to mitigate the incidence of such divergence and frauds.

Tags : LINKAGE   SWIFT   CBS   DIRECTION  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved