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RBI allows banks to buy SWIFT shares without prior approval

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2013-14/131 · issued 11 Jul 2013 · ~2 min read

Quick answerRBI now gives general permission for Indian banks to acquire SWIFT shares, provided they are RBI-licensed and members of the SWIFT User's Group in India. Earlier, each acquisition needed case-by-case RBI approval. This removes a regulatory hurdle for banks.

The rule, in the simplest words

Banks in India can now buy SWIFT shares without asking RBI each time, but only if they are licensed by RBI and are members of the SWIFT User's Group in India.
Before this change, every bank had to get RBI's permission for each purchase of SWIFT shares.
The new rule started right away, from July 11, 2013.
The rule is part of FEMA, which controls money going out of India.
Banks must still follow SWIFT's own rules when buying shares.

How it plays out — a real example

Rajesh, the head of treasury at a mid-sized Indian bank, receives a notice that SWIFT is offering additional shares. Previously, he would have had to prepare a proposal and wait for RBI's approval, which could take months. Now, because his bank is RBI-licensed and already a member of the SWIFT User's Group, he can proceed to acquire the shares immediately, saving time and administrative effort.

What changed

Previously, a resident bank's proposal to acquire SWIFT shares was considered by RBI on a case-to-case basis under the approval route. Now, RBI has granted general permission for such acquisitions, subject to two conditions: the bank must be licensed under the Banking Regulation Act, 1949, and must have been permitted by RBI for admission to the 'SWIFT User's Group in India' as a member. The change is effective immediately.

What it means for you

Banks no longer need to approach RBI for prior approval each time they want to buy SWIFT shares, as long as they meet the stated conditions. This simplifies the process and reduces regulatory delays for banks looking to invest in SWIFT. It also signals RBI's confidence in banks' compliance with FEMA and SWIFT by-laws.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Verify your bank's RBI license under the Banking Regulation Act, 1949.
Confirm your bank's membership in the 'SWIFT User's Group in India' as permitted by RBI.
Ensure any acquisition of SWIFT shares complies with SWIFT by-laws.
Keep records of the general permission and any related FEMA amendments for audit.
Inform your compliance team about this change to update internal approval workflows.

Who it affects

All Category-I Authorised Dealer banks in India, Banks seeking to acquire SWIFT shares, Compliance and treasury departments of banks

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-08-02 04:06 IST
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Do banks still need RBI approval to buy SWIFT shares?

No, if the bank is licensed under the Banking Regulation Act, 1949, and is a member of the SWIFT User's Group in India as permitted by RBI, it can acquire SWIFT shares under general permission. Otherwise, the old case-by-case approval route applies.

What is the legal basis for this general permission?

The change is made under FEMA, specifically under Sections 10(4) and 11(1) of FEMA, 1999, and amends the earlier FEMA 120/RB-2004 regulations via Notification No. FEMA.271/RB-2013.

Does this circular affect other overseas investments?

No, this circular is specific to the acquisition of SWIFT shares. Other overseas investments continue to be governed by existing FEMA regulations.

📜 Read the original circular — full text as issued by RBI

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(DIR Series) Circular No.8 July 11, 2013 To All Category - I Authorised Dealer Banks Madam / Sir, Overseas Investments – Shares of SWIFT Attention of the Authorised Dealers (AD) is invited to Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 notified by the Reserve Bank vide Notification No. FEMA 120/RB-2004 dated July 07, 2004 and as amended from time to time. 2.As per the extant FEMA provisions, the proposal of acquisition of the shares of Society for Worldwide Interbank Financial Telecommunication (SWIFT), Belgium by the resident bank is considered by the Reserve Bank on case to case basis under the approval route. 3.On a review, it has now been decided to grant general permission to a bank in India, being licensed by the Reserve Bank under the provisions of the Banking Regulation Act, 1949, to acquire the shares of SWIFT as per the by-laws of SWIFT, provided the bank has been permitted by the Reserve Bank for admission to the ‘SWIFT User’s Group in India’ as member. 4.This modification shall come into force with immediate effect. Necessary amendment to the Notification No. FEMA.120/RB-2004 dated July 07, 2004 has been issued vide Notification No. FEMA.271/RB-2013 dated March 19, 2013 and notified vide dated G.S.R.No.345 (E) dated 29.05.2013 (copy enclosed). 5.AD - Category I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 6.The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law. Yours faithfully, (C. D. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/131 · issued 11 Jul 2013. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8232&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.