What changed
Previously, banks needed RBI's case-by-case approval to acquire SWIFT shares. Now, RBI has granted general permission for such acquisitions, subject to the bank being a licensed bank and a member of the SWIFT User's Group in India. The change is effective immediately from July 11, 2013, with the underlying amendment to FEMA regulations notified on May 29, 2013.
What it means for you
Banks can now acquire SWIFT shares without seeking prior RBI approval, reducing procedural delays. This simplifies compliance for banks already part of the SWIFT User's Group. Lenders should ensure they meet the membership condition before proceeding.
What you must do
- Verify your bank's membership in the SWIFT User's Group in India before acquiring SWIFT shares.
- Update internal FEMA compliance policies to reflect the general permission for SWIFT share acquisition.
- Inform relevant departments (e.g., treasury, compliance) about the removal of the case-by-case approval requirement.
- Maintain records of SWIFT share acquisitions for regulatory reporting, if needed.
Who it affects
All Category-I Authorised Dealer Banks in India, Banks licensed under the Banking Regulation Act, 1949, Banks that are members of the SWIFT User's Group in India
Do we still need RBI approval to buy SWIFT shares?
No, general permission is now granted if your bank is licensed under the Banking Regulation Act, 1949 and is a member of the SWIFT User's Group in India.
What if our bank is not a SWIFT User's Group member?
You must first obtain membership in the SWIFT User's Group in India before acquiring SWIFT shares under this general permission.
When did this change take effect?
The circular was issued on July 11, 2013, and the modification came into force with immediate effect from that date. The underlying amendment was notified on May 29, 2013.