Finance Update

RBI fines Rs.71 crore on 36 foremost banks for non-compliance in SWIFT

RBI fines Rs.71 crore on 36 foremost banks for non-compliance in SWIFT (Global Messaging Software) operations

  • RBI Stated that the penalties ranging from Rs.1 crore to Rs.4 crore were enforced by orders dated January 31, 2019, and February 25, 2019
  • RBI had carried out an evaluation of compliance with its orders on SWIFT related operations with 36 Banks.
  • Fine of Rs.4 crore each has been enforced on Bank of Baroda, Catholic Syrian Bank, Citibank N.A., Indian Bank and Karnataka Bank.

– TFM Watch

The Reserve Bank of India on Friday stated it has enforced penalties worth Rs.71 crore on 36 public, private and overseas banks for non-compliance with various instructions on time-bound execution and strengthening of SWIFT operations.

SWIFT is a worldwide massaging software utilized for transactions by financial entities. The enormous Rs.14,000-crore fraud at the PNB was an instance of misuse of this massaging software. Bank of Baroda, City Union Bank, HSBC, ICICI Bank, SBI and YES Bank are the few foremost banks in the list.

The penalties were ranged between Rs.1 crore to Rs.4 crore, were enforced by orders dated January 31, 2019, and February 25, 2019, the RBI stated. And added, penalties are based on lacks of regulatory compliance and “is not planned” to pronounce upon the validity of any transaction entered by the banks with their customers.

The RBI had carried out an evaluation of compliance with its orders on implementation and strengthening of SWIFT related operational controls of 50 foremost banks. The evaluation, the RBI stated, uncovered that banks had not followed one or more of the important instructions relating to making of payment messages in the SWIFT and introduction of an extra layer of approval for all payment messages surpassing a specific limit, among others.
On the bases of evaluation conclusions and extent of non-compliance, notices (SCNs) were issued to 49 banks encouraging them to indicate cause regarding why fines should not be enforced for non-compliance with instructions.

“After considering the responses received from the banks, oral submissions made in the personal hearings where sought by the banks and examination of additional submissions, RBI decided to enforce fines on 36 banks, based on the extent of non-compliance in each bank,” the Reserve bank stated.

Fine of Rs.4 crore every ha been forced on Bank of Baroda, Catholic Syrian Bank, Citibank N.A., Indian Bank and Karnataka Bank.

The penalty on BNP Paribas, City Union Bank, Indian Overseas Bank, UCO Bank, Union Bank of India, and United Bank of India, is Rs 3 crore each.

The sum of Rs.2 crore each for Allahabad Bank, Bank of Maharashtra, Canara Bank, DCB Bank, Dena Bank, Jammu and Kashmir Bank, Oriental Bank of Commerce, and Syndicate Bank.

Fine of Rs.1 crore each has been enforced on Bank of America, Barclays Bank Plc, Central Bank of India, Corporation Bank, DBS Bank, Deutsche Bank A.G., HSBC, ICICI Bank and IDBI Bank.

Rs.1crore penalty was included IndusInd Bank, JP Morgan Chase Bank, Karur Vysya Bank, Punjab and Sind Bank, Standard Chartered Bank, State Bank of India, Tamilnad Mercantile Bank and YES Bank.

Source: PTI – Indiatoday

– TFM Watch

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