The Reserve Bank of India has fined private sector lender Yes Bank Rs 1 crore for not complying with its direction about messaging software SWIFT.
“The Reserve Bank of India, in exercise of powers conferred under Section 47 A of the Banking Regulation Act, 1949 has levied an aggregate penalty of Rs 10 Million on the Bank for non-compliance of Regulatory directions observed during assessment of implementation of SWIFT- related operational controls,” Yes Bank said in a BSE filing on Tuesday.
SWIFT, short for Society for Worldwide Interbank Financial Telecommunications, is a messaging system used by lenders the world over to transfer money between banks, particularly foreign currency funds. The messages are sent via an encrypted channel to ensure that transactions remain secure. Now, SWIFT is trusted by over 11,000 financial institutions – banks, brokerages, mutual fund firms, and securities dealers –in more than 200 countries.
The SWIFT infrastructure was used to enable the transfer of funds in the Rs 11,380-crore fraud at the Punjab National Bank. After the PNB scam came to light in 2018, the Reserve Bank of India had directed all banks to tighten all kinds of transactions.
On Monday, the Reserve Bank had imposed a total fine of Rs 8 crore on Karnataka Bank, the United Bank of India and Karur Vysya Bank for not complying with various SWIFT norms, according to PTI. On Saturday, four other banks had announced that they were also penalised. The RBI fined Union Bank Rs 3 crore, Dena Bank Rs 2 crore and the State Bank of India and IDBI Rs 1 crore each for violating several directions.