RBI penalised PNB with Rs 2 cr for violating SWIFT code norms

Earlier RBI had imposed penalties of Rs. 71 Cr on SBI, ICICI Bank, HSBC, Bank of Baroda, Citibank, Canara Bank and Yes Bank for a similar violation

Mumbai: Punjab National Bank (PNB) has been fined with Rs 2 Cr for non-compliance of regulatory directions with regard to SWIFT operations, the state-run lender said Tuesday. In a regular filing statement, PNB informed that the Reserve Bank Of India has informed the bank about the penalty of Rs. 2 Cr in a letter dated March 25, 2019.

"In the matter of violations of regulatory directions by Punjab National Bank observed during the assessment of the implementation of SWIFT-related operational controls, the Reserve Bank of India, (imposes) an aggregate penalty of $20 million … on Punjab National Bank,"

SWIFT code is an ISO approved unique identification software code used by financial and non-financial institutions world over. The infamous Rs. 14,000 cr fraud case of Nirav Modi and Mehul Choksi at the PNB was a case related to misuse of SWIFT Code only.

What is SWIFT Code

SWIFT is a global messaging software used for transactions by financial entities. SWIFT stands for 'Society for Worldwide Interbank Financial Telecommunication'. The ISO (International Organisation for Standardisation) has designated SWIFT as the BIC(Business Insider Codes) registration authority. SWIFT code is used when money is transferred between banks, in particular for international transactions, and also for the exchange of various other messages between banks.

Earlier other banks were fined too

"In the matter of violations of regulatory directions by Punjab National Bank observed during the assessment of the implementation of SWIFT-related operational controls, the Reserve Bank of India, (imposes) an aggregate penalty of $20 million … on Punjab National Bank," the bank said in regular filing statement.

Earlier this year, the Reserve Bank had imposed penalties worth Rs.71 crore on 36 public, private and foreign banks for non-compliance with various directions on time-bound implementation and strengthening of SWIFT operations. However, the list did not include PNB. The Indian banks to be featured in the list were- SBI, ICICI Bank, HSBC, Bank of Baroda, Citibank, Canara Bank, and Yes Bank.