 "Better protection for depositors and investors was one of the chief considerations in Union Finance Minister Nirmala Sitharaman introducing, on Friday, the Banking Laws (Amendment) Bill, 2024, in the Lok Sabha to amend four pieces of legislation.")
Indian Banks' Association (IBA) has asked all banks to fast-track the implementation of the SWIFT ISO 20022 norms, failing which they may face difficulties in cross-border payments.
In a letter recently written to heads of all banks, IBA Chief Executive Atul Kumar Goel said it is essential for lenders to begin migration by August 2025 to ensure sufficient buffer time for monitoring ISO 20222 transaction volumes.
ISO 20022 is a global standard for financial messaging that the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is adopting for cross-border payments and reporting.
This new standard for messaging aims to improve the payments flow through faster processing, visibility, cost reduction, enhanced reconciliation and increased interoperability.
As many as 3 banks in India reached a migration percentage rate of above 85 per cent, while the majority of banks are still targeting migration closer to the global deadline of November 2025, the letter said.
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 "RBI, Reserve Bank of India")
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This approach may pose significant operational and technical risks for India as a country, including exposure to message rejections, reduced readiness for exception handling, and potential customer impact, Goel cautioned banks.
SWIFT began its migration to ISO 20022, with a coexistence period that will continue until November 2025, according to the letter.
The coexistence period is a migration phase to ensure a smooth transition to a new format, allowing the use of the new and existing legacy MT messaging standard for a limited period.
The coexistence period between the legacy systems (MT) and ISO 20022 will officially end on November 22, 2025.
Any MT payment instruction messages in the scope post November 22, 2025, will fail validation, the IBA informed banks.
Institutions that wish to prevent risk of service disruption due to stricter network validation, loss of data, and avoid additional charges should ensure they do not send FIN (financial information) /MT (message type) instruction messages for cross-border bank-to-bank payments after November 2025, it said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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