a day ago
SWIFT deadline nears: Indian banks face payment disruption risk
India's top private lenders are yet to fully migrate to a new
cross-border payments
messaging system ahead of a November deadline, officials aware of the migration said, raising disruption risks from non-compliance should the rollout stick to the announced schedule.
So far, only the
State Bank of India
(SBI) has fully transitioned to the
ISO 20022
SWIFT messaging standard, said two officials aware of the matter. India's compliance falls well below the global adoption rate of 43%, they said.
"Indian banks are major laggards in adopting ISO 20022; despite multiple deadline extensions, only SBI has transitioned to the new standards," said an official overseeing the migration. "While
SWIFT
has postponed the deadline a few times, we believe there will be no further extensions."
SWIFT-the Society for Worldwide Interbank Financial Telecommunication-is the backbone for global financial messaging, used by more than 11,000 banks worldwide to facilitate cross-border payments and settlements.
Another source highlighted the real-world impact of non-compliance, warning of potential payment disruptions.
"SWIFT has made it clear that the November 2025 deadline will not be deferred, so institutions that don't comply in time risk severe payment disruptions and penalties," the official said.
This creates a pressing need for banks to prioritise the upgrade to avoid disruption of critical international payment flows.
As per SWIFT, ISO 20022 enables richer, better structured and more granular data end-to-end to be carried in payments messages. The protocol ensures operational benefits that include improved analytics, less manual intervention, more accurate compliance processes, higher resilience, and improved fraud prevention measures.
Insiders suggested that in India, the slow pace of migration is due to the complex task of overhauling core systems.
ET in its March 5 edition had reported that while Indian banks are in talks with SWIFT on migrating to the ISO 20022 messaging standard, only four Indian banks have partially transitioned to the new system.
The report had also stated that SWIFT plans to impose penalties on banks still using the old set-up after the global deadline of November 25 ends as it has been suggesting speeding up migration to the new mechanism.
SWIFT has maintained that it is crucial that all financial institutions maintain their key objective to migrate to ISO 20022 and complete their implementation without delay.
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