The Society for Worldwide Inter-bank Financial Telecommunication (S. W. I. F. T.) is providing reliable facilities for exchange of financial messages all over the world. SWIFT is a worldwide community of financial institutions whose purpose is to be the leader in communications solutions enabling interoperability between its members, their market infrastructures and their end-user communities. It is the industry-owned cooperative supplying secure messaging services and interface software to 7,000 financial institutions in 197 countries. SWIFT carried over 1.5 billion messages in 2001. The average daily value of payment messages on SWIFT is estimated to be above USD 6 trillion.

SWIFT provides messaging services to banks, broker/dealers and investment managers, as well as to market infrastructures in payments, treasury, securities and trade. These services help customers reduce costs, improve automation and manage risk.

SWIFT is a cooperative society under Belgian law and is owned and controlled by its members. It has a Board of up to 25 Directors who are responsible for overseeing and governing the company. The Board oversees the Executive, a team of full-time employees headed by a Chief Executive Officer. The Executive is responsible for the preparation, integrity and objectivity of the consolidated financial statements and other information presented in the Annual Report.

The basic objectives of SWIFT are to -

1. Work in partnership with its members to provide low-cost, competitive financial processing and communication services of the highest security and reliability.

2. Contribute significantly to the commercial success of its members through greater automation of the end-to-end financial transaction process, based on its leading expertise in message processing and financial standards setting.

3. Capitalise on its position as an international open forum for the world's financial institutions to address industry-level threats, issues and opportunities.

4. Employ and recruit the best people, invest in the most beneficial resources, and become a leading global organisation respected for its professionalism, effectiveness, vision and management.

SWIFT was established in 1973. With Forty square metres of office space in the centre of Brussels, a handful of people and an ambitious idea and Supported by 239 banks in 15 countries, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) started the mission of creating a shared worldwide data processing and communications link and a common language for international financial transactions. SWIFT makes sure that the financial institutions that will use the messages are heavily involved in the development process to ensure effectiveness and practicality.

Rules defining responsibility and liability are written, operational practices put in place. Fundamental principles behind SWIFT are established at an early stage.

Because SWIFT's shareholders represent a broad international base, best practice from several countries has influenced the Company's governance. The Board has seven committees with delegated decision powers: Audit and Finance, Banking and Payments, Compensation, 'E', Securities, Standards, Technology and Production.

SWIFT is committed to an open and constructive dialogue with oversight authorities. Oversight on SWIFT is based on a special arrangement by the central banks of the G10 countries, represented by the Committee on Payment and Settlement Systems (CPSS). Under this arrangement, the National Bank of Belgium, the central bank of the country in which SWIFT's headquarters are located, acts as lead overseer of SWIFT, supported by the central banks of the G10. The issues discussed can include all topics related to systemic risk, security and availability. Topics that overseers discussed in 2001 with SWIFT include the implementation of SAS 70, Trust Act, the security audit findings, and selected management processes relating to security and availability. Discussions on the latter also entered upon security and availability of SWIFT services in the light of the network subcontracting arrangement with Global Crossing.

Over the years SWIFT has grown into a world-wide service-provider. As at end of 2001 it has 7457 live users in 196 countries and handled in that year 1,534,000,000 Messages.

S.W.I.F.T. User Group is formed in India with the Chairman IBA as the Chairperson and the Chief General Manager-in-Charge, Department of Information Technology, Reserve Bank of India as the Alternate Chairperson. Currently there are 92 institutions comprising of banks, brokers and dealers, central depositories and clearing organisations, who are the user members of S.W.I.F.T. in India :

• Members 48

• Sub-Members 36

• Brokers & Dealers 1

• Central Depositories and Clearing 1

• Non Shareholding Banks 5

• Representative Offices 1

• Total 92

Single-window access to and for the global financial industry is the ambition underpinning SWIFTNet. In 2001, SWIFTNet messaging services saw their first fully live implementations by domestic market infrastructures: the Bundesbank's RTGSPlus system and the Bank of England's Enquiry Link. S.W.I.F.T. is scheduled for open migration to the SWIFTNet services from July 2002. The S.W.I.F.T. Users in India would also need to migrate from the current X.25 connectivity protocol to the Next Generation IP (Internet Protocol) based SWIFTNet services. To facilitate a smooth migration, the S.W.I.F.T. Users in India will have to get adequate training and education on the technical aspects and other related information on the SWIFTNet services. S.W.I.F.T. is planning to conduct a series of workshop/seminars for the S.W.I.F.T. Users in India for disseminating the technical, operational and other related information on the SWIFTNet services.

The banks in India are being connected through the INFINET for Inter-bank and Intra-bank transactions electronically. The INFINET is a VSAT based closed user group network for the exclusive use of the banking and financial sector. There is a closed user group comprising of members who have joined the INFINET for initiating Inter-bank and Intra-bank electronic transactions through the network. The closed user group has decided that to facilitate ease of usage and create inter-operability between the various members of its network standard message formats be designed and developed for most of the common applications on the network. Accordingly, a Committee of Bankers in India deliberated on the issue and decided that a eleven digit coding pattern be introduced for identifying the bank/financial institution and their branches when transactions are initiated through the network. This system of eleven digit coding pattern called "Indian Financial System Code (IFSC)" shall also be included in all S.W.I.F.T. international messages to facilitate routing of the messages direct to the beneficiary branch in India and thus putting in place "Straight Through Processing (STP)" on a large scale. For achieving the above, the Committee of Bankers has recommended that a routing symbol "//IN", may be introduced which will uniquely identify messages meant for India and the beneficiary branch in India and the same be registered with S.W.I.F.T. as India's National Routing Code.

The S.W.I.F.T. has considered the above recommendations of the Committee of Bankers and the National Clearing Code (Routing Code) for India ("//IN") has now been incorporated by S.W.I.F.T. in their routing system.