Last week, IBA had met to discuss the alleged scam at PNB.
Indian Banks' Association chairperson Usha Ananthasubramanian today said there is an urgent need for banks to revisit their risk management system and plug the loopholes.
Ananthasubramanian, who is managing director and CEO of Allahabad Bank, said at her bank also, SWFIT is not linked to CBS and the process of linking both the systems is currently on.
The country's second largest PSU bank has detected a USD 1.77 billion scam where billionaire jeweller Nirav Modi allegedly acquired fraudulent letters of undertaking (LoU) from its Brady House branch in Mumbai to secure overseas credit from other Indian lenders. The fraud allegedly started in 2011 at PNB.
“Banks are reviewing and revisiting the systems to ensure drawbacks/ loopholes if any, are addressed so that the system becomes robust. Swift linkage to CBS is being fast-tracked by Banks,”Ananthasubramanian told reporters here today.
Before moving to Allahabad Bank, Ananthasubramanian was managing director and CEO of PNB between August 2015 to May 2017. She was also the executive director of PNB from July 2011 to November 2013.
She said the Reserve Bank has asked banks that have not linked SWIFT to CBS to complete the process by April 30, 2018.
"That could be a deadline, but it is an outer limit. Today, the urgency is such that everyone wants this (linkage of SWIFT to CBS) project to be on fast track," Ananthasubramanian said.
Last week, IBA had met to discuss the alleged scam at PNB.
In the meeting, Ananthasubramanian was present. It was also attended by Bank of India managing director and CEO Dinabandhu Mohapatra, ICICI Bank chief financial officer NS Kannan and IBA deputy CEO B Rajkumar, among others.
When asked about the outcome of the meeting by reporters today, Ananthasubramanian said, "I don't know anything about it."
She also refused to divulge Allahabad Bank's total loan exposure to companies related to Nirav Modi.
Last week, in a regulatory filing, Allahabad Bank had said it has an exposure of nearly USD 366.87 million in the form of Letter of Undertakings (LoUs).
"The bank through its overseas branch at Hong Kong has been taking exposure with PNB as country party under various LoUs issued through authenticated SWIFT message," Allahabad Bank said in a filing.
The Bank also purchased some Buyers' Credit assets from Axis Bank extended against PNB LoU through risk participation.
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 "Urgent need for banks to revisit risk management system, says IBA chairperson")
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