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Indian banks to have a SWIFT of their own

Global financial transaction facilitating system SWIFT is developing a first-of-its-kind domestic network in India. The network will facilitate Indian banks and companies to send and receive financial information for local transactions. According to news reports, the Belgium-based co-operative of more than 10,800 financial institutions earlier this month received the Reserve Bank of India’s approval to start operations through its local subsidiary named Swift India Domestic Services (SIDS), which will allow Indian banks and financial services institutions to exchange messages on letters of credit, guarantees and treasury operations among others. M.V. Nair, chairman, SIDS, said nine top banks which account for 55-60% of transactions in India own 45% of the company and have already joined the network. These are State Bank of India, Canara Bank, Union Bank of India, Punjab National Bank, Bank of India, Bank of Baroda, HDFC Bank, ICICI Bank and Axis Bank. Though Indian banks have been using the SWIFT messaging system for international financial transactions since 1991, local inter-bank transactions communication was mostly paper-based. In December 2001, the RBI-funded Institute for Development Research in Banking Technology (IDRBT) launched the structured financial messaging system (SFMS) through which banks can communicate securely.

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