SWIFT is a global messaging software used for transactions by financial entities. The massive Rs 14,000-crore fraud at the PNB was a case of misuse of this messaging software.The banks include, Bank of Baroda, City Union Bank, HSBC, ICICI Bank, SBI and YES Bank.
The penalties, ranging from Rs 1 crore to Rs 4 crore, were imposed by orders dated January 31, 2019, and February 25, 2019, the RBI said in a statement. It, however, added that penalties are based on deficiencies in regulatory compliance and “is not intended” to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
The RBI had carried out an assessment of compliance with its directions on implementation and strengthening of SWIFT-related operational controls of 50 major banks.The assessment, the RBI said, revealed that banks had not complied with one or more of the major direction pertaining to direct creation of payment messages in the SWIFT environment and introduction of an additional layer of approval for all payment messages exceeding a particular threshold, among others.Based on the findings of the assessment and extent of non-compliance, notices (SCNs) were issued to 49 banks advising them to show cause as to why penalty should not be imposed for non-compliance with directions.
“After considering the replies received from the banks, oral submissions made in the personal hearings where sought by the banks, and examination of additional submissions, if any, RBI decided to impose monetary penalty on aforementioned 36 banks, based on the extent of non-compliance in each bank,” the central bank said.Penalty of Rs 4 crore each has been imposed on Bank of Baroda, Catholic Syrian Bank, Citibank N.A., Indian Bank and Karnataka Bank.The penalty on BNP Paribas, City Union Bank, Indian Overseas Bank, UCO Bank, Union Bank of India, and United Bank of India, is Rs 3 crore each.The amount is Rs 2 crore each in case of Allahabad Bank, Bank of Maharashtra, Canara Bank, DCB Bank, Dena Bank, Jammu & Kashmir Bank, Oriental Bank of Commerce, and Syndicate Bank.
Penalty of Rs 1 crore each has bene slapped on Bank of America, Barclays Bank Plc, Central Bank of India, Corporation Bank, DBS Bank, Deutsche Bank A.G., HSBC, ICICI Bank and IDBI Bank.Also Rs 1 crore each penalty has been imposed on IndusInd Bank, JP Morgan Chase Bank, Karur Vysya Bank, Punjab & Sind Bank, Standard Chartered Bank, State Bank of India, Tamilnad Mercantile Bank and YES Bank.