Kerala High Court: ED Can Investigate Without FIR in Scheduled Offence Cases (CMRL Matter)  ||  Delhi High Court Upholds TRAI Rule Capping TV Advertisements at 12 Minutes Per Hour  ||  Supreme Court Directs High Courts to Deliver Judgments in 3 Months and Bail Orders in One Day  ||  Supreme Court: Successful Resolution Applicant Cannot Negotiate Further After CoC Approval  ||  Supreme Court: Succession Law Applies, Not Primogeniture, to Ex-Royal’s Private Estate Inheritance  ||  Supreme Court: Writ Jurisdiction Cannot Challenge Arbitrator’s Section 16 Decision  ||  Supreme Court: Sanyasi Status Cannot Be Ground to Reject Land Compensation Claim  ||  Supreme Court: Section 33(1)(a) of Arbitration Act Cannot Alter Nature of Interest in Award  ||  Supreme Court: Society Office Bearers Not Liable for Cheque Dishonour Without Active Business Role  ||  Supreme Court: Asking a Woman to Adjust in Marriage Does Not Amount to Cruelty By In-Laws    

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 2026 - All Rights Reserved