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RBI imposes Rs 1 crore fine on Yes Bank for nonfulfillment in Swift operations

RBI imposes Rs 1 crore fine on Yes Bank for nonfulfillment in Swift operations: On Tuesday, the Private sector lender Yes Bank said that the Reserve Bank of India has imposed a fine of Rs 1 crore on the bank for nonfulfillment of guidelines on Swift messaging software.

RBI levies Rs 1 crore penalty on Yes Bank for non-compliance of instructions related to Swift

Yes Bank informed stock exchanges in supervisory filings on Tuesday by stating, “The Reserve Bank of India (RBI)… has levied an aggregate penalty of Rs 10 million (Rs 1 crore) on the bank for non-compliance of regulatory directions observed during assessment of implementation of SWIFT-related operational controls”.

SWIFT stands for the “Society for Worldwide Interbank Financial Telecommunication.” SWIFT is basically a network of more than 8,300 banks, securities, and companies situated in over 208 nations. SWIFT permits for the interchange of millions of consistent financial messages in the middle of financial institutions all over the world.

SWIFT was formed in 1973 by bankers who were in requisite of a more well-organized and safe system for interbank communications and transmission of reserves and securities.

SWIFT provides a platform for banks, establishments and other financial associations to interchange messages, allowing banks to work accommodatingly with other banks situated across the street, and across the globe.

Swift is the worldwide messaging software used for transactions or dealings by the financial bodies. The huge Rs 14,000 crore fraud at the PNB was a case of abuse of this messaging software.

Particularly, the huge amount of Rs 14,000 crore fraud at the Punjab National Bank (PNB) was an incident of exploitation of this messaging software.

After the fraud by PNB bank, which came to light in February 2018, the RBI has been rough on banks to constrict all types of transactions.

On Monday, RBI had enforced a total fiscal fine of Rs 8 crore on three banks such as Karnataka Bank, United Bank of India and Karur Vysya Bank for the reason of non-compliance of instructions on Swift messaging software.

Previously on Saturday, four banks such as SBI, Union Bank of India, Dena Bank and IDBI had also informed exchanges about financial fine slapped on them by the supervisory body for nonfulfillment with several directions.

Fine of Rs 3 crore was forced on Union Bank, while Rs 2 crore on Dena Bank,  as well as Rs 1 crore each on IDBI and the SBI.

The RBI has charged a collective fine of Rs 40 million on the bank for late execution of four of the Swift associated functioning controls, Karnataka Bank said in a regulatory filing.

United Bank said in a separate filing, “The exchanges are hereby informed that Reserve Bank of India…, has imposed an aggregate penalty of Rs 30 million on the Bank to be deposited within 14 days, for non-compliance with, and contraventions of, directions contained in the RBI circular on time-bound implementation and strengthening of SWIFT-related operational controls”.