PNB scam: SWIFT code is the reason

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So, for the banking scam in PNB, it is not particularly responsible for the easing of the rules. The signal is something like this, even after such a huge scam, the Reserve Bank has not yet implemented the obligation to link Swift’s messages to the Core Banking System (CBS) for different banks. The advantage of this screwing rule is that the employees of PNB branch of south Mumbai are picked up. He did not mention the letters of Undertaking (LOU) sent by Swift in CBS for payment in favor of companies of Neerav Modi and his colleagues. PNB management says that due to this the fraud could not be caught for so many years. According to RBI rules, there is no need to enter swift payment every time in CBS.

Swift is a special electronic financial messaging platform that orders international payments. Messages from Allahabad Bank, Axis Bank and many other Indian banks from the branch of PNB were being sent by using this technique for payment in favor of Neerav Modi. Generally, bank employees are expected to enter every financial transaction in CBS immediately. But bank employees are not obliged to do so. This is stated in the new instructions issued by the central bank on behalf of the bank after the PNB scam has surfaced. But according to the rules of RBI, the transaction through swift without CBS should be very low. Simultaneously, the central bank’s rule also states that this transaction should be registered in the bank account or any other accounting system. Also, the instructions for payment through Swift should be done only after thorough investigation. CBS is the information technology system of every bank in which every financial transaction is accounted for.

Previously, Swift’s drawbacks: In the suggestion sent to the banks on behalf of RBI, it has been accepted that since August, 2016, he has warned about the risks associated with the use of this technique at least three times. . Indeed, not just the RBI, but in many countries of the world, there have been concerns about the scandal through this financial platform. First, in the year 2016, there was a shortage of Swift from the $ 8.1 million (about 525 million) banking fraud in Bangladesh. It was believed that some cyber criminals sent money abroad through Bangladesh’s swift banks. More recently, the City Union Bank of India’s private sector has said that two million dollars (around 13 crore rupees) were sent out of the account using Swift platform from one of its accounts. Similar incidents have emerged in some other countries of the world. It is believed that SWIFT should be fully linked to CBS of banks for its solution. If the RBI had strictly enforced this rule in the country, then this scam of PNB was caught very long ago.

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