CSB slapped Rs4 cr penalty for SWIFT-related lapses

List of penalised banks inlcudes SBI, ICICI Bank, Citibank, Standard Chartered, Bank of America

MUMBAI: The Thrissur-based Catholic Syrian Bank (CSB) and other 35 banks including public sector and foreign banks – large, medium and small, were slapped penalties ranging from Rs 4 crore to Rs one crore by Reserve Bank of India (RBI) for non-compliance with various directions issued by RBI on time-bound implementation and strengthening of SWIFT-related operational controls, according to an official release.

The banks that were imposed the highest penalty of Rs4 crore include CSB, Bank of Baroda, Citibank N.A, Indian Bank and Karnataka bank.

The RBI statement explained that the action followed an assessment of compliance with RBI directions on implementation and strengthening of SWIFT-related operational controls of 50 major banks.

“The assessment revealed that banks had not complied with one or more of the major directions pertaining to (i) direct creation of payment messages in the SWIFT environment, (ii) implementation of Straight Through Processing (STP) between CBS/Accounting System and SWIFT system, (iii) ensuring that users entering/ passing/authorizing the transactions in CBS were different from those operating in SWIFT environment, (iv) independent reconciliation of logs generated from SWIFT with corresponding entry passed in the CBS/accounting system, (v) introduction of an additional layer of approval for all payment messages exceeding a particular threshold, and (vi) Nostro reconciliation on T+1/T+5 basis,” the official statement clarified.

The other major banks the figure on the list include State Bank of India (SBI), ICICI Bank and also foreign banks such as Barclays Bank, Bank of America, Deutsche Bank A.G, Hong Kong and Shanghai Banking Corporation Ltd, JP Morgan Chase Bank and Standard Chartered Bank.

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