Foreign News: RBS payment failure could last days, China's Bocom sets template for reform, India's n

Banking Day staff
  • Royal Bank of Scotland customers will have to wait until end of the week for some payments to enter their accounts. The BBC reports that about 600,000 payments of wages, tax credits and disability living allowance were among those that failed to be credited to accounts. Customers from RBS, NatWest, Coutts and Ulster Bank - all part of the same banking group - have been affected by the latest system failure. RBS initially said the payments were missing but later identified and fixed the underlying problem, which stemmed from certain information not being input.

  • China's fifth-largest bank, Bank of Communications, has been given approval for a reform plan as Beijing seeks to improve efficiency at state-owned companies, while maintaining control. Bocom has often been used as test case for changes that are later introduced throughout the state-dominated banking sector, the Financial Times reports. The bank said, in a regulatory filing, that its reform plan would "explore" the introduction of private shareholders while "persisting" with state control. The bank is also looking at "mixed ownership" via employee shareholding plans and stock option-based incentives. This could sidestep the large pay cuts for senior banking executives that were mandated earlier this year, the FT notes.

  • Indian microfinance company Bandhan Financial Services has received regulatory approval to begin operating as a bank from the end of August. Its primary objective will be to make banking more accessible to India's rural population. Reuters reports that Bandhan, which received its final banking license from the Reserve Bank of India, has hired 850 experienced banking professionals from other banks and expects to have 500 to 600 bank branches and ten million customers in its initial phase, ahead of an IPO in 2018.

  • Financial information service SWIFT, in collaboration with the Association of Islamic Banking Institutions Malaysia, has announced the launch of a new rulebook on message standards for the Islamic banking and finance market. It aims to provide greater clarity on the use of shariah-compliant MT messages to expedite market harmonisation and increase straight-through processing. Kiyono Hasaka, SWIFT's Asia Pacific standards specialist, said "automation of Islamic finance confirmation flows is now possible through the adoption of international MT messaging standards".