Banks need to improve their risk management systems and plug security loopholes, Indian Banks’ Association chairperson Usha Ananthasubramanian said on Friday, PTI reported.
Ananthasubramanian, also the Managing Director and Chief Executive Officer of Allahabad Bank, said SWIFT, or Society for Worldwide Interbank Financial Telecommunication system, at her bank was also not yet linked to core banking solutions.
SWIFT, the system used by lenders across the world to transfer money between banks, is at the heart of the Rs 11,380-crore Punjab National Bank scam. While SWIFT is supposed to be a relatively secure medium, those involved in the PNB scam managed to breach its different security levels. PNB is also not the only Indian bank whose systems were breached. On February 17, private lender City Union Bank informed stock exchanges that its SWIFT system had also come under a cyber attack.
Ananthasubramanian, who was earlier Managing Director and chief executive officer of PNB between August 2015 to May 2017, said the process of linking the SWIFT with core banking solutions was in progress at Allahabad Bank, and most other banks were also fast-tracking the process.
The Reserve Bank of India has asked all banks that are yet to link SWIFT to the core banking system to do so April 30, 2018, she said. “That could be a deadline, but it is an outer limit,” she said. “Today, the urgency is such that everyone wants this project to be on the fast track.”
Ananthasubramanian, however, refused to divulge Allahabad Bank’s total loan exposure to companies related to Nirav Modi. In a regulatory filing, Allahabad Bank said last week that it has an exposure of nearly $366.87 million (Rs 2,374 crore).