Punjab National Bank (PNB) has taken a series of measures to check misuse of SWIFT message platform, allegedly used by Nirav Modi and his associates to defraud the bank of Rs 1,2967.86 crore, the Finance Ministry said today.

State-owned PNB has reported fraudulent issuance of Letters of Undertaking (LoUs)/ Foreign Letters of Credit (FLCs) for payments of import bills, amounting to Rs 12,967.86 crore, to the RBI, Minister of State for Finance Shiv Pratap Shukla said in a written reply to the Rajya Sabha.

He said as per inputs from PNB, messages were sent via SWIFT to overseas branches of Indian banks, regarding fraudulently issued LoUs/FLCs without entering the transactions in the bank’s Core Banking System (CBS).

He further said that PNB has appraised that it has taken several steps to ensure that such unauthorised activities are not repeated.

Listing out the steps taken by PNB, Shukla said the bank has established an additional tier (off-site) as a third level of re-authorisation of SWIFT messages, wherein payment messages are re-authorised by a separate team of SWIFT centre, Mumbai only.

“Switching off of SWIFT server (LTE) by 10 pm, and restricting SWIFT operations at branches to 6.30 pm and centralised back office for trade finance by 7 pm”, is another step taken by PNB.

Concurrent auditors at branches to ensure physical reconciliation of all SWIFT messages with CBS on daily basis and monitoring of SWIFT user ID creation/resetting, are some of the other measures taken by the bank.

In another reply, the minister said the PNB has informed that the banking transactions are being carried out in the normal course and there is no adverse impact on its customers.

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