The Reserve Bank of India (RBI) has imposed a penalty of ₹4 crore on Karnataka Bank, ₹3 crore on City Union Bank, ₹2 crore on DCB Bank and ₹1 crore on Karur Vysya Bank Ltd. for delayed implementation of SWIFT-related operational controls. Besides these four banks, the RBI has also fined Indian Bank (₹4 crore), IOB (₹3 crore) and United Bank of India (₹3 crore) for the same violations. SWIFT is the global messaging software used for transactions by financial entities.
PNB fraud aftermath
Following the ₹14,000-crore fraud in Punjab National Bank, RBI had directed banks on time-bound implementation and strengthening of SWIFT-related operational controls, in a circular dated February 20, 2018.
Last week, SBI, Union Bank of India, Dena Bank and IDBI Bank had informed the exchanges about the monetary penalty imposed on them for non-compliance with various directions.
In September 2018, the RBI had also imposed ₹5 crore on KVB for non-compliance with its directions on “Income Recognition and Asset Classification norms, reporting of frauds, and on the need for discipline at the time of opening of current accounts.”