NEW DELHI: The Reserve Bank of India on Tuesday said it had confidentially cautioned and alerted banks at the possible misuse of SWIFT, the device used for international money transfer, on a minimum of three occasions since August 2016.
"The risks arising from the potential malicious use of the SWIFT infrastructure, created by banks for their genuine business needs, has always been a component of their operational risk profile. RBI had, therefore, confidentially cautioned and alerted banks of such possible misuse, at least on three occasions since August 2016," the Reserve Bank's notification stated.
The RBI said it has shaped a panel to look into causes for components resulting in expanding incidents of frauds in banks. The panel can even glance into causes for high divergence in NPA classification and provisioning by banks.
The central financial institution further said that "as part of its ongoing efforts for strengthening of the supervisory framework in the country, RBI has been issuing necessary instructions to banks from time to time on a variety of issues of prudential supervisory concern, including the management of operational risks inherent in the functioning of banks."
It added that "in the wake of SWIFT-related fraud involving significant amount, reported recently by Punjab National Bank (PNB), RBI has reiterated its confidential instructions and mandated the banks to implement, within the stipulated deadlines, the prescribed measures for strengthening the SWIFT operating environment in banks."
The notification comes because the RBI has been underneath the spotlight after PNB disclosed remaining week it were hit by a Rs 11,300 crore loan fraud.
"The risks arising from the potential malicious use of the SWIFT infrastructure, created by banks for their genuine business needs, has always been a component of their operational risk profile. RBI had, therefore, confidentially cautioned and alerted banks of such possible misuse, at least on three occasions since August 2016," the Reserve Bank's notification stated.
The RBI said it has shaped a panel to look into causes for components resulting in expanding incidents of frauds in banks. The panel can even glance into causes for high divergence in NPA classification and provisioning by banks.
The central financial institution further said that "as part of its ongoing efforts for strengthening of the supervisory framework in the country, RBI has been issuing necessary instructions to banks from time to time on a variety of issues of prudential supervisory concern, including the management of operational risks inherent in the functioning of banks."
It added that "in the wake of SWIFT-related fraud involving significant amount, reported recently by Punjab National Bank (PNB), RBI has reiterated its confidential instructions and mandated the banks to implement, within the stipulated deadlines, the prescribed measures for strengthening the SWIFT operating environment in banks."
The notification comes because the RBI has been underneath the spotlight after PNB disclosed remaining week it were hit by a Rs 11,300 crore loan fraud.
RBI had warned banks thrice on possible misuse of SWIFT system
![RBI had warned banks thrice on possible misuse of SWIFT system]()
Reviewed by Kailash
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February 20, 2018
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