Punjab National Bank Current Affairs - 2019

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RBI slaps penalty on PNB for violating SWIFT norms

The Reserve Bank of India (RBI) has fined Punjab National Bank (PNB) Rs 2 crore for violation of compliance with regulatory directions regarding SWIFT operations.

The RBI has toughened the stance against banks on all kind of regulatory norms post PNB fraud which put it to question the ability of the central bank. Earlier in March 2019, RBI had imposed a total monetary fine of Rs 8 crore on three banks- Karnataka Bank, United Bank of India and Karur Vysya Bank for not complying with the directions on Swift messaging software.

What is SWIFT?

SWIFT which stands for Society for Worldwide Interbank Financial Telecommunications is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes.

Under SWIFT, each financial organization has a unique code which is used for sending and receiving payments.

Suppose a customer of a Bank of America of New York Branch wants to send money to the ICICI bank account in Bengaluru, he can approach the Bank of America’s New York Branch with the account number of ICICI to which the money needs to be deposited and ICICI Banks Swift Code for the Bengaluru branch.

Bank of America’s New York Branch will send the payment message to the ICICI Bengaluru branch over the secure SWIFT network. Once ICICI ‘s Bengaluru branch receives the SWIFT message about the incoming payment, it will clear and credit the money to the account.

SWIFT code is used when the transfer between two banks happens internationally as we use IFSC codes for the domestic transfers i.e. financial transactions within the geographical territory of India.

Month: Categories: Business, Economy & BankingUPSC

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EASE Index Report

The BCG-IBA report EASE Reforms for Public Sector Banks measures the performance of each PSB on 140 objective metrics across 6 themes. The 6 themes are:

  • Customer Responsiveness: EASE for customer comfort
  • Responsible Banking: Financial stability, governance for ensuring outcomes, and EASE for clean & commercially prudent business
  • Credit Off-take: EASE for the borrower and proactive delivery of credit
  • PSBs as UdyamiMitra: EASE of financing and bill discounting for MSMEs
  • Deepening Financial Inclusion & Digitalisation: EASE through near-home banking, microinsurance and digitalisation
  • Ensuring outcomes – HR: Developing personnel for Brand PSB.

Findings of the Report

  • Punjab National Bank has been ranked first among public sector banks in the implementation of ‘reforms agenda’, followed by Bank of Baroda and State Bank of India.
  • Punjab National Bank with a score of 78.4 out of 100 has been ranked first under the theme of EASE (Enhanced Access & Service Excellence). PNB is followed by BoB (77.8), SBI (74.6), Oriental Bank of Commerce (69), Canara Bank (67.5) and Syndicate Bank (67.1).
  • The six Public sector banks which are under PCA framework of the RBI have also been ranked under the Index. The performance of PSBs is as shown Indian Overseas Bank (66.7), UCO Bank (64.1), United Bank of India (60.8), IDBI Bank (60.2), Central Bank of India (55.7) and Dena Bank (53.8).

The government had announced in January 2018 that the government would come out with EASE -Index for ranking of banks aimed at increasing the public accountability of PSBs as independent agencies evaluate and rank PSBs annually on reforms.

The report has been commissioned through Indian Banks’ Association and authored by BCG with Forrester Inc., Kantar IMRB and TransUnion CIBIL as knowledge partners.

Month: Categories: Business, Economy & BankingUPSC

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