Bhattacharya, who spoke to
ET on the sidelines of Sibos 2019, a financial services conference organised in London, also called on India to participate more vigorously to showcase IT innovation at global platforms.
“Public sector banks (PSBs) have a lot of challenges in the way they can bring about changes. They have to follow several processes, which delays decision-making,” said Bhattacharya.
“The biggest issue is there is very little continuity; from the GM level, you are constantly getting shifted around. They are not clones; their ways of conducting business differs vastly from each other.”
The government recently announced the merger of 10 state-run banks overnight into four, along with the much-awaited governance reforms that include making PSB managements accountable to their respective boards, strengthening the executive succession process and giving longer tenures to top-level directors so that structural changes yield desired results.
SWIFT is an international payments messaging system and its platform is used to transfer trillions of dollars. It recently partnered with the Delhi government to implement e-stamping that helps banks in generating e-guarantees.
“We have found a solution to the stamping problem. Delhi government has implemented it and we are engaging with other governments to digitise this process end-to-end,” Bhattacharya said. “This is not understood in the West at all, but is very peculiar to India. India should be putting out a lot of innovations into the world. The UPI platform today is unparalleled anywhere.”
SWIFT India has also established a customer security programme (CSP) to assist customers in protecting and securing their local environments, in preventing and detecting fraud in their commercial relationships, and sharing and utilising fraud-related information to defend against cyber threats.
“My request to the banking community is that participants should implement the customer security programme. Today, it is much important than yesterday because hackers are now going after smaller retail accounts. Unless and until you define what your parameter should be, you are running a big risk,” she added.
The Indian banking system detected Rs 71,500 crore worth of frauds in 2018-19, which, to put in scale, is slightly more than the Rs 71,000 crore recapitalisation package planned by the government to revive the health of the public sector banks.
Interestingly, over 90% of these losses were to the government-owned banks while the share of incidents that emanated from these lenders was at 55.4%. Overall, 3,766 incidents of frauds were detected in FY19, a 15% spike from a year ago, while the losses incurred saw an 80% rise from the last year.
“Following the money trail is very difficult. Once it’s crossed the border, it’s very tough to make out,” Bhattacharya said. “The world has to come together to agree to share information on money trails. Today this doesn’t happen. Without this, it is very difficult to establish frauds banks continue to grapple with such cases.”
(The writer was in London at the invitation of SWIFT)