The Indian Banks’ Association (IBA) has urged banks to accelerate the implementation of SWIFT ISO 20022 norms, warning that failure to do so could result in difficulties in cross-border payments.
Banks must begin the migration process by August to allow sufficient buffer time to monitor ISO 20022 transaction volumes, IBA chief executive Atul Kumar Goel stated in a recent letter addressed to the heads of banks.
ISO 20022
ISO 20022 is a global standard for financial messaging, and SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a key player in its adoption, particularly for cross-border payments. ISO 20022 utilises XML syntax to provide richer, more structured data for financial transactions, enhancing efficiency and facilitating better compliance and fraud prevention.
SWIFT is migrating to ISO 20022, replacing the older MT message types with MX messages, with a coexistence period ending in November 2025.
Banks lag behind as deadline looms
Only three banks in India reached a migration percentage rate of above 85%, while the majority of banks are still targeting migration closer to the global deadline of November 2025, Goel said.
He cautioned that this delayed approach could create significant operational and technical risks for India’s banking system, including message rejections, limited preparedness for exception handling, and adverse impacts on customers.
The coexistence period is a migration phase to ensure a smooth transition to a new format, allowing the use of the new and existing legacy MT messaging standard for a limited period. Any MT payment instruction messages in the scope post November 22, will fail validation, the IBA said.
Institutions that wish to prevent risk of service disruption due to stricter network validation, loss of data, and avoid additional charges should ensure they do not send FIN (financial information) /MT (message type) instruction messages for cross-border bank-to-bank payments after November, it said.