Source: BS
Context:
The SWIFT (Society for Worldwide Interbank Financial Telecommunication) network has announced a new framework to improve cross-border retail payments, aiming to make international transfers faster, cheaper, and more predictable.
Major Indian banks such as State Bank of India (SBI), HDFC Bank, ICICI Bank, and Axis Bank are expected to roll out the system as part of the global transition.
What is SWIFT?
SWIFT is a global financial messaging network that enables banks and financial institutions to securely communicate payment instructions for international money transfers.
- Used by over 11,000 financial institutions worldwide
- Facilitates cross-border banking transactions and remittances
Objectives of the New Framework
The new system aims to:
- Speed up international retail payments
- Reduce transaction costs
- Improve transparency and predictability of payment timelines
- Support small businesses and individual remittance senders
Key Features of the Framework
- Faster cross-border payments
- Better tracking of transactions
- Improved data standardisation
- Greater interoperability between banks
These improvements will reduce delays and uncertainties often associated with international transfers.
Importance for India
India is expected to benefit significantly from the new framework because:
- India is one of the largest remittance-receiving countries in the world.
- Millions of Indians working abroad send money home regularly.
Faster and cheaper payment systems will help:
- Families receiving remittances
- Small businesses involved in international trade
