The RBI has imposed penalties on 7 Banks for delayed implementation of SWIFT-related operational controls. Following the ₹14,000-crore fraud in Punjab National Bank, RBI had directed banks on time-bound implementation of SWIFT-related operational controls, in a circular dated February 20, 2018.
SWIFT:
SWIFT stands for “Society for Worldwide Interbank Financial Telecommunication.”
Status: SWIFT is a global member-owned cooperative society under Belgian law.
Establishment: It was founded in 1973 by a group of 239 banks from 15 countries.
Headquarters: La Hulpe, Belgium.
Functions:
SWIFT is a secure financial message carrier. its core role is to provide a secure transmission channel so that Bank A knows that its message to Bank B goes to Bank B and no one else.
Apart from this, it also sells software and services to financial institutions, much of it for use on the SWIFTNet Network.
What it doesn’t?
SWIFT does not facilitate funds transfer: rather, it sends payment orders, which must be settled by correspondent accounts that the institutions have with each other.
It does not hold accounts for its members.
It does not perform any form of clearing or settlement.
Usage:
SWIFT is used by financial institutions like Banks, Depositories, Exchanges, Corporate Business Houses etc.
The majority of international interbank messages use the SWIFT network.
SWIFT India:
SWIFT India is a joint venture of top Indian public and private sector banks and SWIFT (Society for Worldwide Interbank Financial Telecommunication).
The company was created to deliver high quality domestic financial messaging services to the Indian financial community.
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