SWIFT (Society for Worldwide Interbank Financial Telecommunication)

Why in NEWS ? 

The European Union recently cut seven Russian banks from the SWIFT payment system. Detailed read

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What is SWIFT ? 

It is a cooperative society headquartered in Belgium and the members are banks and financial institutions of different countries.. It is a method of communication among banks/financial institutions for sending financial messages around the world.

SWIFT provides a way to encrypt financial messages between the banks/financial institutions in such a way that only the sender bank and the receiver bank will know the details. No one else in between can break the encryption. Messages sent through SWIFT are almost real time.

Are Indian bank  a part of SWIFT payment system ?

Yes.For detailed list ,Please Visit this site

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What is a SWIFT Code:

It is a unique ID for the Bank which is a part of the SWIFT system. It is also known as Bank Identifier Code (BIC) Structure of SWIFT Code:For example "SBININBB103" is the SWIFT code SBIN = First four letters denote the Bank i.e. State Bank of India IN = 5th & 6th letters denote the Country i.e. India BB = 7th & 8th letter denotes the Location i.e. Bombay 103 = 9th,10th & 11th character denotes the Branch and its optional.

For example, a specific Silicon Valley Bank (SVB) has the 8 character SWIFT code “SVBKUS6S”. “SVBK” is the bank code. “US” is the country code (United States), “6S” is the location code. Since this is the primary SVB branch, you can append “XXX” to the end of the SWIFT code, but it's optional

So, SWIFT codes are unique identifier for the different financial institutions/banks around the world which are part of the SWIFT society and they use this SWIFT code as "SENDER" and "RECEIVER" identifier and the messages (related to payment, amount, or any information) which are sent among them are in the encrypted form which only the sender and the receiver can decode.