Punjab National Bank stepped up its strict SWIFT controls after $1.77 billion fraud

Vastavam web: India’s state-run Punjab National Bank has stepped up its controls on the use of global payments network SWIFT following an alleged $1.77 billion fraud, according to memos issued this month.India’s second biggest state lender this month revealed the country’s biggest loan fraud, which it alleges was committed by two junior officials at a Mumbai branch, who issued unauthorised “letters of undertaking” (LOU) via SWIFT, for firms linked to a billionaire jeweller Nirav Modi and his uncle Mehul Choksi.A lawyer for Modi has denied his client was involved in any fraud. Choksi has not commented but his firm, Gitanjali Gems, has also denied involvement in the alleged fraud.

The new measures mean only PNB officers will be able to initiate messages on SWIFT, taking away the authority of clerks to do so. Several new limits have been placed on the amount that officers can generate depending on their seniority in the bank hierarchy.“In continuation of efforts to strengthen SWIFT operation and deploy additional measures to ensure more effective control, it has been decided to set up SWIFT user base limits,” the note went on to say.

A SWIFT spokeswoman in Brussels said it was aware of the reports around PNB but that it could not comment on individual customers.“When a case of potential fraud is reported to us, we offer our assistance to the affected user to help secure its environment,” Natasha de Terán said. “SWIFT can reassure customers that there is no indication the SWIFT network has been compromised.”