NEW DELHI, APR 12: The Indian banking system faces "medium risk" of not being able to achieve Y2K (year 2000) compliance on time, international credit rating agency Moody's has warned.A number of banks in 30 emerging markets, including India, could face serious difficulties from year 2000 problems, a Moody's report on "Emerging markets banks and the year 2000 bug" has said.However, the report said it was difficult to know how hard Y2K would hit these individual banks. It said Russian banks had the highest degree of risk that they would not complete the Y2K preparedness on time, followed by banks in Pakistan, Egypt, Romania, Slovakia and Tunisia with medium to high risk.The banking system in India, Greece and Kazakhstan would face medium risk from the bug, that is set to hit the world on the midnight of December 31, 1999, the report said."Many of these banks are poorly prepared either because they began preparations late or because they could be hurt by possible year 2000-related mishaps in theirnation's major infrastructure providers such as telecommunications or electricity companies," the report by Moody's analysts Elisabeth Jackson-Moore and George Paschalis said.In comparison with progress in western Europe and the US, these banks find their situations complicated by government control, weak leadership from regulators, lack of resources and a shortage of available information technology experts, the Moody's report said."In our opinion, the lack of timely and effective guidance from regulators is a major factor explaining why banks are currently behind their western counterparts," it said.However, the analysts said these markets' risk from Y2K might be lower because they tend to be less reliant on computer sophistication than their western counterparts."The vulnerability of these markets to Y2K is less than for banks in the major global economies because banks are smaller, offer fewer and less complex products, and are less automates." As result, the report said, these banks need todo less work to achieve compliance.For this reason, the banking system of Israel, South Africa and Saudi Arabia are considered to be at higher risk because they are most dependent on technology, the report said.However, this advantage would be offset by the fact that in most emerging markets time was short and expertise and resources were scarce, the report said.
