RBI unveils IT vision for 2008-10

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{image-inflation+rbi_02032008.jpg www.oneindia.com}Mumbai, Mar 2: Information Technology will continue to play a dominant role over the next three years in streamlining operations in the financial and banking sector, already the largest user of IT and ITES, in customer centric operations.

Visualising a higher degree of IT usage by the sector, the RBI in its IT vision document for 2008-10 said the move would be towards centralisation of the system for greater customer service delivery, benefitting Banks in in terms of facilities such as Customer Relationship Management (CRM), Customer Profiling and Differentiation and for improved customer service, the Apex bank said in its document IT vision for 2008-10. The Central bank said IT usage by banks in India had come of age with the financial sector becoming more IT savvy and the banking sector, emerging one of the largest users of It and IT enabled services.

During the next phase, RBI said the role of technology service providers and intermediaries would gain greater significance in the context of increased outsourcing; for the banks and financial institutions, the complexities in handling in vendor management as part of outsourcing need to be addressed so as to ensure the risks arising out outsourcing were minimised.

RBI, which had played a substantial role in ushering in Technology based banking in the initial period and for largescale computerisation, subsequently said it would gradually move away and take a participatory role as the financial sector had attained the level of maturity reuired for this changed focus.

As a move aimed at better Governance, one of the major changes planned would be that the Reserve Bank would not perform the dual role of a service provider and a regulator. This would be achieved by hiving off of service delivery functions wherever feasible.

The Apex bank said IT usage by banks would continue to exist in substantial scales. The Reserve Bank would also be leveraging on the facilities available through IT for improved functioning of the central bank, commercial banks and the financial sector as a whole.

.. The Central bank said as measures aimed at enhancing the payment and settlement systems of the country, the recommendations of the Working Group on Electronification of Payments would be implemented on time bound basis. With the sector completing the implementation of Core Banking Systems the next move would be to integrating the Core Banking Systems with the common interbank payment systems offered by the Reserve Bank - such as the National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) to facilitate 'Straight Through Processing (STP)' modes.

There would be need for for effective and safe Business Continuity Plans by ensuring adequate Disaster recovery Systems and the regular, periodical testing of critical systems, the document stressed.

With IT becoming deeply ingrained in the normal processing systems of banks, IS Audit gains greater importance. IS Audit would be a regular function of the internal processes of Inspection and Concurrent Audit in banks as also of external/independent audit.

To this end, tools and technologies such as COBIT and conformity to internationally accepted standards such as ISO 27001 would be made use of.

It said a crucial activity which needs to be completed in a time bound manner relates to the IT related aspects pertaining to conformity to the BASEL II requirements by banks.

The processing of Government related transactions is also envisaged to undergo substantial changes after the acceptance of electronic modes of data and/or funds movement is accepted by the Government. This, coupled with the impending introduction of Cheque Truncation, would result in changes in the processing systems and cycles, which will be facilitated by IT based systems, wherever feasible.

.. While revisiting its IT vision, the Apex bank said IT remained a main catalyst in the forces of change. It too had enhanced the usage of IT as a tool for better performance and overall system efficiency. ''The vision for the three year period commencing from 2008 holds great scope for innovation and differentiation for the financial sector'' the vision document said adding that IT would continue to be the ''predominant factor acting as the main catalyst in the force of change''.

It said Core Banking Systems would have stabilised well and all banks would have migrated to a large portion of their branch operations being conducted using Core Banking Systems Sharing of costly resources would be the norm and this would work positively for the benefit of the banking system as a whole.

RBI said work would also be taken up for introduction of Extensible Markup Language (XML) based reporting by banks to the Reserve Bank with impetus being given to XBRL based transaction flows, for which a Committee has been constituted under the Chairmanship of Deputy Governor V Leeladhar.

For the corporate customer and financial institutions, SFMS would be made available through the Internet as well so that this could be used as a facility for the transmission of financial messages in a secure and safe manner.

Inter-linkage of SFMS and S.W.I.F.T. would be achieved so as to provide for STP based message transfers between the SWIFT gateway and the respective bank/branch in the country.

The use of mobile means of communications for banking related transactions in general and payment services in particular would assume greater importance. To this end, efforts would be channeled to provide for standards for such systems, best practices to be followed, and suitable regulatory / oversight framework provided for.

The Reserve Bank would also be implementing its own Core Banking System for the benefit of its customers. This would provide for 'Anywhere Access' for its constituents. As far as possible, electronic based transactions processing using an STP based process would be provided for.

The Integrated Computerised Currency Operations and Management System (ICCOMS), which is being rolled out to all locations, would become the means for effective information collation in respect of currency notes movement in the country, which would ultimately result in better currency management for the country as a whole.

UNI

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