Swift Norms

• The SWIFT is a secure financial message carrier through a standardized system of codes.
• In other words, it transports messages from one bank to its intended bank recipient. Its core role is to provide a secure transmission channel so that Bank A knows that its message to Bank B goes to Bank B and no one else. Bank B, in turn, knows that Bank A, and no one other than Bank A, sent, read or altered the message in route. Banks, of course, need to have checked in place before actually sending messages.
• It assigns each financial organization a unique code or SWIFT code that has either eight characters or 11 characters.
• Aimed at services around financial crime compliance, SWIFT offers reporting and utilities like Know Your Customer (KYC), Sanctions, and Anti- Money Laundering (AML).
• The SWIFT is a global member-owned cooperative that is headquartered in Brussels, Belgium. It was founded in 1973 by a group of 239 banks from 15 countries which formed a co-operative utility to develop a secure electronic messaging service and common standards to facilitate cross-border payments.
• The Rs.14,000-crore Punjab National Bank (PNB) fraud perpetrated by Nirav Modi was a case of misuse of this SWIFT software.
• After the fraud, PNB adopted strict SWIFT controls. It has created a separate unit to reauthorize most messages sent over SWIFT by branches. Many other banks are expected to fast-track the integration between SWIFT and their backend systems.

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