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March 21, 2018
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‘Urgent need for banks to revisit surveillance system’‘SWIFT-CBS non-linkage could have led to PNB fraud’

Admitting that the failure to link SWIFT to core banking system (CBS) could have led to the about ₹11,400-crore fraud at Punjab National Bank, the former head of the scam-hit lender said there was an urgent need for banks to revisit their surveillance system and plug loopholes.

Usha Ananthasubramanian, who is now managing director and CEO of Allahabad Bank, said that at her bank too SWIFT (Society for Worldwide Interbank Financial Telecommunication) was not linked to CBS and the process of linking both systems was currently on.

“I want to tell you that there could be always [loopholes] because technology advances so fast that what is today could get obsolete tomorrow and you might not have upgraded. Now, it is time for all of us [banks] to very closely revisit [the surveillance system] and then take all steps that can create maximum security,” Ms. Ananthasubramanian told reporters here on Friday.

The fraud allegedly started in 2011 at PNB. Before moving to Allahabad Bank, Ms. Ananthasubramanian was managing director and CEO of PNB between August 2015 and May 2017. She was also the executive director of PNB from July 2011 to November 2013.

‘An outer limit’

She said that the Reserve Bank had asked banks that had not linked SWIFT to CB, to complete the process by April 30, 2018. “That could be a deadline, but it is an outer limit,” she said.