The Reserve Bank of India (RBI) has levied a penalty of Rs 4 crore on Karnataka Bank for delayed implementation of four “Swift” related operational controls, the lender said on Monday.
The Swift system is a messaging network used by banks and other financial institutions globally to send and receive information, such as money transfer instructions.
“The Reserve Bank of India, in exercise of powers conferred under Section 46 and 47A of the Banking Regulation Act, 1949 has levied an aggregate penalty of Rs 40 million on the Bank for delayed implementation of four of the Swift-related operational controls,” Karnataka Bank said in a regulatory filing to the BSE.
The Swift system gained spotlight after the Rs 14,000-crore fraud at the Punjab National Bank that took place reportedly due to misuse of this messaging software.
After the fraud came to light in February 2018, the RBI has been tough on banks for tightening all kinds of transactions.