MUMBAI, JULY 1: A Reserve Bank of India (RBI) committee has come out with the road map for electronic banking in India and has sought promulgation of a legislation on electronic funds transfer (EFT) system to facilitate multiple payment systems for banks and financial institutions.Recommending that the RBI Act 1934 should be amended, the committee said the central bank should be entrusted with the regulatory and supervisory powers on payment and settlement systems for electronic fund transfer. The committee on technology upgradation was chaired by RBI executive director A Vasudevan.The committee said that a standing committee of members drawn from legal departments of RBI, Indian Banks' Association (IBA) and a few banks should be set up to examine legal issues on electronic banking and also to scrutinise in detail issues on confidentiality of data in the computerised environment and in the context of banker's secrecy obligations.The committee said Infinet (Indian financial network) should be a blendof satellite, microwave and terrestrial links and may be expanded by using a blend of satellite and land links as media for payment and settlement systems backbone with the growth in network traffic.It stated that there should be an appropriate institutional arrangement for key management and authentication by way of a certification agency and the RBI may consider appointing Institute for Development and Research in Banking Technology (IDRBT) for the purpose.The committee said RBI and banks should also have a standing committee with members having requisite expertise to periodically review standards/security policies/message formats/system software and their implementation. Banks have been advised to outsource software technology since it was a better option in the context of rapid changes in the information technology industry.The committee said all branches of banks dealing with government transactions need to be computerised and suggested that in the first phase, computerisation of all focal pointbranches and state government link cells should be completed by March 31, 2000 to be followed by the second phase on an expeditious basis.It felt computerisation of government departments should be synchronised with the computerisation of bank branches dealing with government transactions.A need was also felt for connecting public accounts departments of RBI to central accounts section, RBI, Nagpur to enable same day reporting and booking of government transactions.Essential Management Information System (MIS) founded on data warehousing and data mining at individual bank level, has been stressed, for implementing various regulatory guidelines including the latest one on Asset Liability Management (ALM).The committee said all banks should put in place their data warehouse strategy by January 1, 2001 and a task force may be set up by IBA to explore feasible methodology for working out a unique identification system for individual customer data bases at banks.It said RBI could establish a datawarehouse on banking and finance for the data collected under the regulatory provisions. A suggestion has been made that banks choose the branches and areas of operation where they have already introduced a certain degree of automation and computerisation and review the systems and procedures in these branches/areas to adapt them to the technology that is newly introduced.``These banks should now attempt to have a hi-tech bank within the bank,'' the committee said. It has suggested that larger banks should explore the possibilities of giving exposure to their technical staff on the latest developments that are taking place around the world in the area of it and allied areas by deputing technical officers to the banks and other specialised institutions abroad.
