The State Bank of India (SBI) officials on Thursday reiterated the fact that except for the one-off incident involving Punjab National Bank (PNB), no unauthorised Letters of Undertakings (LoUs) have been issued by public sector banks (PSBs).
"It is important to note that the major incident that took place recently in one of the branches of a PSB is one of its kind in about 5000 branches dealing in foreign exchange in the entire banking system in India," SBI officials told reporters.
Public Sector Banks organised a three day workshop of executive directors, chief risk officers and chief technical officers of PSBs at the State Bank academy, Gurugram with a view to ascertaining the prevailing risk management practices amongst them and arrive at a common understanding with regard to the best practices.
During the workshop, banks deliberated upon the best practices.
Action plans were drawn to further strengthen the controls in the areas of trade finance, Society for Worldwide Interbank Financial Telecommunication (SWIFT), credit risk, operational risk besides cyber and IT risk.
The banks will now place these action plans with timelines for implementation and improvement before the respective boards.
"Each bank has already scanned their LOU/LOC related transactions and have confirmed during the workshop that all of them are properly assessed, genuine and accounted for except those already reported," the apex bank said in a notification.
Further controls have also now been put in place that includes additional layer of approval for all outward SWIFT messages, integration of SWIFT with the Core Banking Solution (CBS) latest by April 30, 2018 besides time restrictions for such transactions, between 9 am to 8 pm only.
During the workshop, participants also debated on the common areas for strengthening credit process.
Besides, it was also agreed that all banks will henceforth follow the uniform approach for certain common covenants.
In addition, banks will further strengthen their mechanism with regard to the Early Warning Signals.
Improving risk awareness and ethical awareness amongst staff, preventive monitoring and surveillance of transactions, strengthening Know Your Employee (KYE) through technological intervention are some of the action points identified to further strengthen operational risk management.
Banks are in the process of establishing Onsite Cyber Security Operation Centre (C-SOC) wherever not in place to monitor all IT assets.
During the press conference, officials on behalf of all PSBs assured that they are committed to provide Enhanced Access and Service Excellence (EASE) to all customers in a safe and secured environment.
"The brand PSB is safe and sound to bank with," the officials concluded.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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