Process of linking core system with SWIFT in full swing ahead of April 30 deadline
Mumbai : In a move to avoid further PNB-like scams in the sector, lenders are speeding up the process of linking their core banking system with global payments network SWIFT. Though the Reserve Bank of India (RBI) has given a April 30 deadline, the process is in full-swing, said Usha Ananthasubramanian, chief of Indian Banks Association (IBA).
Ananthasubramanian, in an conference, told reporters, “RBI has given April 30 s deadline, but we have to get it done quickly.” She also asserted that banks have been following the RBI’s mandate and only the linkage was pending.
The RBI, in a communique, stated that it had warned banks on three occasion since August 2016 about the possibility of such misuse.
Ananthasubramanian, who is also Chief Executive Officer and Managing Director of Allahabad Bank, said that the circular has been sent to all its branches to speed up the activity. Talking about technology, Ananthasubramanian said that every bank has taken their own path to secure themselves and they have taken appropriate measures to ensure security. She added, “It is time for all of us to closely revisit it and take all steps to create maximum security.”
When asked about the exposure of Allahabad Bank in the Nirav Modi scam, she said that she cannot comment on PNB. During the conference, Ananthasubramanian urged banks to implement better controls and monitoring systems to ensure that elements within the bank do not jeopardise the interest of the entire bank with or without collision with outsiders. “Banks have to review existing controls including access control and monetary integration of application; and pick the weakness,” she added.
PNB steps up SWIFT controls
Mumbai : Scam-hit Punjab National Bank (PNB) has stepped up its controls over the use of SWIFT. The new measures allow only PNB officers to initiate messages on SWIFT, taking away the authority of clerks to do so. Several new limits have been placed on the amount that officers can generate depending on their seniority in the bank hierarchy.
In a circular to its regional branches, the lender stated any SWIFT message will have to be created, verified and authorised by three different officers. “In continuation of efforts to strengthen SWIFT operation and deploy additional measures to ensure more effective control, it has been decided to set up SWIFT user base limits,” the circular said. The circular clearly stated that a clerical staff acting as an officer cannot be assigned the power. But it will only be valid if the Circle Head on recommendation of the branch will allow him to use the powers of the next higher level officer. If an officer is transferred or retired or is suspected, the process of deactivation of SWIFT user ID will be initiated, the circular stated.
Plugging the gaps
RBI has moved to tighten regulations in the wake of the alleged fraud.
RBI set out more than two dozen checkpoints it asked them to comply with within set timelines
Checkpoints that included setting a limit on payment instructions on SWIFT where the beneficiaries were individuals, and putting an additional layer of security on transactions beyond a certain threshold
