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Banks rush to tweak the internal policies
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Why in the news ?
- After the central bank directed the banks to link their core banking systems (CBS) with inter-bank messaging platform SWIFT, banks are scurrying to install systems to prevent frauds.
- The Reserve Bank of India has directed banks to complete the CBS-SWIFT integration by 30 April.
More on news
- The scam at PNB went unnoticed for years, allegedly because unauthorized transactions were made on SWIFT, which was not linked to the bank’s CBS.
- SWIFT is short for Society for Worldwide Interbank Financial Telecommunication, a worldwide messaging platform for banks.
- To ensure the timely and smooth integration, lenders are planning to add an interface which will be linked to both CBS and SWIFT.
- Additional steps being taken by banks include instituting better security infrastructure, more frequent audits of internal controls, and review of human resources (HR) policies, including leaves and job rotations.
- Banks are also planning to put in place one-time password (OTP)-based system to log in to SWIFT.
Source
The Mint.