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(THE GIST OF PIB) Society for Worldwide Interbank Financial Telecommunication System

(OCTOBER-2024)

A Russian envoy in India recently called for an alternative to the SWIFT system used for global payments, from which Russia was expelled after the beginning of war in Ukraine.

It is a member-owned cooperative that provides safe and secure financial transactions for its members.
Establishment: It was founded in 1973 by 239 banks from 15 countries.
SWIFT is a network that banks use to communicate with each other securely, mainly to give instructions for transferring funds between accounts.
SWIFT is the largest and most streamlined method for international payments and settlements.
SWIFT works by assigning each financial organization a unique code with either eight or 11 characters, known as a bank identifier code, or BIC.
By standardizing communication protocols, SWIFT ensures that financial institutions can reliably conduct cross-border transactions, reducing the risks and inefficiencies associated with international banking.
Although SWIFT is crucial to global financial infrastructure, it's not a financial institution.
SWIFT does not hold or transfer assets but facilitates secure, efficient communication between member institutions. It transmits essential details such as the recipient’s account information and transfer amount.
Headquartered in La Hulpe, Belgium, the system is overseen by the central banks of the G10 countries, the European Central Bank, and the National Bank of Belgium.
Its shareholders represent around 3,500 member organisations.
SWIFT shareholders elect a board of 25 directors who govern the organisation and oversee management of the SWIFT system.