PSBs Link SWIFT to CBS

PSBs asked to link SWIFT systems to respective Core Banking Systems

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All Public Sector banks in India have been instructed to link their respective SWIFT systems with their CBS (Core Banking Solution) Systems by the 30th of April, 2018.

The move comes in the wake of the massive financial fraud that recently shook Punjab National Bank, the country’s second largest Public Sector Bank (PSB). Additionally, state-run PSBs have also decided to accelerate the process of purchasing cyber insurance, an insurance component that has largely been underrated, and proven costly for Punjab National Bank in the recent fraud. The decision, including other decisions, were taken during a 3-day risk management workshop attended by senior officials from various PSBs.

State Bank of India Managing Director and Risk Officer, M S Shastri, mentioned that PSBs have decided to keep SWIFT transactions active only between 9:00 am and 8:00 pm in order to avert potential risks. Furthermore, a recent self-audit carried by each of the PSBs on their respective Letters of Undertaking and Letters of Comfort, revealed that no more such fraudulent transactions exist following the PNB bank fraud case.

The PNB fraud was recently valued at Rs. 13,540 crore, and was perpetrated by Nirav Modi and Mehul Choksi, both bigwig diamond merchants. They acted brazenly in collusion with PNB staff who misused access to the bank’s SWIFT system and issued unauthorised LOUs in the name of the accused merchants.

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