The Reserve Bank of India on Friday expressed concern over the IT system architecture in 356 small urban co-operative banks (UCBs) and the failure of as many as 171 UCBs to fully implement core banking solutions (CBS). “I am aware that some of the larger UCBs have put in place robust IT system architecture; but I am worried about the smaller UCBs — 124 banks with deposit size of less than Rs 10 crore and another 232 banks with deposit size of between Rs 10 crore and Rs 25 crore,” RBI Deputy Governor NS Vishwanathan said. The RBI official’s warning came ten days after Pune-based Cosmos Co-operative Bank witnessed a major cyber attack with fraudsters siphoning off Rs 94 crore. He said the argument that adoption and implementation of IT increases the cost of operations is not acceptable because IT enabled operations are a necessity to be relevant in the market place and at the same time, one needs to do what it takes to ensure safety of depositors. “Use of IT enabled processes also help contain frauds. In this context, it is a matter of concern that there are still 171 UCBs which have yet to fully implement CBS and have also not availed the assistance being provided by Reserve Bank in this regard,” he said while addressing the ‘Sahakar Setu’ organised by the Gujarat Urban Cooperative Banks Federation. “Digital banking comes with risks associated with cyber security concerns,” he said. Banks need to have robust IT systems and subject them to regular IS audits.
