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Report: Punjab National Bank beefs up internal controls on SWIFT payments


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Report: Punjab National Bank beefs up internal controls on SWIFT payments

Punjab National Bank strengthened internal controls on the use of the global payments network SWIFT following the discovery of a 114 billion-rupee loan fraud at one of its branches, Reuters reported, citing internal memos issued by the state-run bank.

The bank's new measures require that only Punjab National Bank officers can use SWIFT and that clerks can no longer send messages through the payments network. The bank also implemented new limits on the amount that officers can generate depending on their seniority in the bank. Any SWIFT message also needs to be created, verified and authorized by three different officers, starting Feb. 22. Previously, the bank allowed only two individuals to start the process.

The bank is beefing up its SWIFT controls after it discovered that two junior officials at a Mumbai branch of the bank issued unauthorized letters of undertaking, or LOUs, through SWIFT to firms linked to jeweler Nirav Modi and his uncle Mehul Choksi. India's Central Bureau of Investigation has already arrested six bank officials in connection with the fraud case. Modi has denied any wrongdoing.

Punjab National Bank also set up a new unit called Treasury Division Mumbai that will reauthorize most messages sent over SWIFT by branches.

A SWIFT spokeswoman said she was aware of the reports around Punjab National Bank but could not comment on individual customers.

As of Feb. 21, US$1 was equivalent to 64.81 Indian rupees.