India’s central bank Reserve Bank of India (RBI) has directed all lenders to integrate Society for Worldwide Interbank Financial Telecommunication (SWIFT) with their core banking solutions (CBS) by the end of April this year.
The directive comes a week after the state-run lender Punjab National Bank (PNB) detected a more than $1.77bn fraud at one of its branches in Mumbai.
Besides setting a timeframe for SWIFT integration, RBI has ordered the lenders to fulfil multiple regulations in a bid to tighten internal controls in the banks.
The central bank has stated that the banks can issue a loan or guarantee only when it is reflected in the core banking or accounting system of the lender.
It has also directed to strengthen the use of SWIFT infrastructure and introduce an additional layer of security on transactions beyond a certain level.
Furthermore, RBI has called a limit on the foreign currency payment instructions for individual beneficiaries.
Most of these new regulations are required to be implemented immediately while for some regulations, the deadline varies from March-end to the end of June this year.
Multiple Indian banks including PNB are yet to link their CBS with the SWIFT network, which is used by banks across the globe to communicate with each other on transactions.