Hindusthan Samachar
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RBI imposes penalty on 36 banks for non-compliance of SWIFT-norms

By HindusthanSamachar | Publish Date: Mar 9 2019 5:39PM
RBI imposes penalty on 36 banks for non-compliance of SWIFT-norms
Delhi, Mar.09(HS): Reserve Bank of India has imposed penalty of Rs 71 crore on 36 public, private sector and foreign banks for non-compliance of the guidelines related to SWIFT (Society for Worldwide Interbank Financial Telecommunication) in order to to strengthen the SWIFT mechanism. SWIFT is the global messaging software used for transactions by financial institutions. The PNB fraud case of Rs.13,500 crore was a case of misuse of this messaging software. The RBI said, in a statement, that it has imposed penalty from Rs.1 crore to Rs. 4 crore on banks according to the orders dated 31 January 2019 and 25 February 2019.However, it adds that the penalty is based on regulatory compliance shortcomings and "not intended" to interfere in the recognition of the agreement entered by banks with their customers. The RBI evaluated the implementation of the SWF-related operational controls of 50 major banks and its compliance with the view of strengthening it.In this evaluation of RBI, it was found that the directives related with the sending of payment messages directly to the SWIFT framework and directives for adding an additional approval level for the payment beyond a prescribed limit have not been followed by many banks. Based on the errors and evaluation rules, 49 banks were issued ''show cause notice'' in relation to non-compliance of the directives so that they can give an explanation for why they should not be penalized, the Central Bank said that after considering the oral information given in the personal hearing sought from the banks and any extra information handed over to it, and after considering the responses received from the banks, the RBI has decided to impose financial penalties on the aforesaid 36 banks. Bank of Baroda, Catholic Syrian Bank, Citibank NA, Indian Bank and Karnataka Bank have also been imposed a penalty of Rs 4 crore each.Penalty of Rs 3 crore has been imposed on on BNP Paribas, City Union Bank, Indian Overseas Bank, UCO Bank, Union Bank of India, and United Bank of India. In case of Allahabad Bank, Bank of Maharashtra, Canara Bank, DCB Bank, Dena Bank, Jammu and Kashmir Bank, Oriental Bank of Commerce and Syndicate Bank, each has to pay Rs. Penalty of 2 crores. While, Bank of America, Barclays Bank Plc, Central Bank of India, Corporation Bank, DBS Bank, Deutsche Bank AG, HSBC, ICICI Bank and IDBI Bank received a penalty of 1 crore each.Indsind Bank, JP Morgan Chase Bank, Karur Vysya Bank, Punjab and Sindh Bank, Standard Chartered Bank, State Bank of India, Tamil Nadu Mercantile Bank and YES Bank were imposed a penalty of Rs. 1 crore each. Hindustan Samachar/Bharati/Pramod \
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