Highlights:
- Reserve Bank of India has imposed a fine of 71 Crores on 36 banks
- Banks did not update their systems under the SWIFT platform
- Bank of Baroda, Catholic Syrian Bank, Citibank, Indian Bank, and Karnataka Bank have been fined Rs. 4 Crores by RBI
Reserve Bank of India has imposed a fine of 71 Crores on 36 banks for not updating their systems under the SWIFT1 platform.
It is the biggest crackdown on errant banks by RBI across the banking industry.
Had these 36 banks upgraded their systems, then the system would have updated records when funds are transferred overseas.
Punjab National Bank had not linked the SWIFT messaging terminal in its Brady House Branch to its central server. For this reason, an official could send over Rs. 13,000 crores on behalf of Nirav Modi and Mehul Choksi without any authorization.
Bank of Baroda, Catholic Syrian Bank, Citibank, Indian Bank, and Karnataka Bank have been fined with the highest penalty of Rs. 4 crores each. The other remaining 6 lenders have been charged with Rs. 3 crores penalty, eight banks Rs 2 crore and the remaining 16 banks Rs 1 crore each.
Only 50 banks were inspected and out of that 49 have issued show-cause notices. RBI has decided to fine 36 of them.
1SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. It is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes.
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