Financial messaging services provider SWIFT launched its services in India on Thursday, bringing with it a unified messaging protocol that can link banks, financial intermediaries, regulators, and stock exchanges and clearing agencies through one suit that can secure transactions by keeping records in a dematerialised form.
While the services do not facilitate transactions per se, it generates encrypted messages for every transactions made, thereby minimising chances of fraud and easy reconciliation of accounts.
Newly formed Bandhan Bank, IDFC Bank and Tata Consultancy Services were among 13 clients which signed up for the services on the first day.
SWIFT India is a joint venture between SWIFT SCRL and nine Indian banks — State Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, Axis Bank, HDFC Bank, ICICI Bank, and Union Bank of India. The entity will be regulated by the Reserve Bank of India (RBI) and the data centre will be located in India, which is a departure from SWIFT’s usual practice.
Under the conditions laid down by RBI, SWIFT would be ready to share data with the regulator, but will not do so as a practice, said Alain Raes, chief executive EMEA and Asia Pacific, SWIFT.
RBI has opted to be in the Euro Zone grouping as the group has stricter data sharing norms. Since the data centre will be located in India, SWIFT will not oblige any country seeking transaction data of Indian banks but will have to approach RBI first.
SWIFT works in over 200 countries, and has clients in 10,800 banks, securities institutions and corporate customers. About 90 per cent of the transactions generate in the domestic market of the operation.