The Reserve Bank of India (RBI) expects its plans to set up a information technology subsidiary for checking cyber threats, to take shape in the next six to eight months, its Governor Raghuram G Rajan said on Friday. The subsidiary will have experts from the IT domain to check possible threats and also help the central bank to use technology in regulation and supervision, he said.
“The setup of an IT subsidiary will help up on issues such as the cyber security and evaluate the technical capabilities of banks,” Rajan said. “With banks planning for paperless banking system, which is largely IT dependent, a dedicated IT subsidiary is needed to stay ahead of cyber criminals.”
Rajan was speaking at the 11th Institute for Development and Research in Banking Technology (IDRBT) awards ceremony in Hyderabad. Adopting technology could also reduce the high-cost structure prevalent in banking system, he said.
The central bank, in a recent meeting, had proposed setting up an information technology subsidiary that would help increase its capabilities in the technology sector. It has already received an approval form the board for the appointment of chief executive officer. HR Khan, Deputy Governor of RBI said the new IT subsidiary would work in consultation with IDRBT.
“We have to constantly examined our readiness in the face of new innovations in the field of cyber crime. We have thus far been relatively immune to any major cyber attacks on our banks but we can’t take that for granted,” he said. Its time to create less tradeoff between convenience and security at same time by the banks, he added.
With growing dependence on information technology in the banking sector, Rajan said there is a need to ensure better compliance with regulations to prevent data theft and check financial fraud. In recent times, SMAC (social, mobile, analytics and cloud) is the concept which is driving innovation and making security even a bigger challenge, he said. There is a need to ensure better compliance with regulations to prevent data theft and check financial fraud.
On Friday, IDRBT signed an memorandum of understanding with National Payments Corporation of India (NPCI) for a research collaboration in the areas of mobile payments and analytics.
In a separate speech earlier in the day, Rajan stressed the role of government spending in reviving growth, especially because exports have gone down in recent months.
“Our country is today facing number of challenges regarding implementation of economic reforms and we are putting it back on the right path by certain measures. We need to focus in implementation and improve capacity at every level of the economy. We should concentrate on village infrastructure and national infrastructure as well to keep economic growth and check inflation levels,” Raghuram Rajan said while delivering the 30th lecture on the theme “Reforming India’s Economic Institutions” at Sardar Vallabhai Patel National Police Academy in Hyderabad.
The RBI Governor, who surprised the markets with a 50 basis points cut in rates in his recent review meet said aspects such as macro stability, human capital, business environment, taxation, Judiciary and allocating resources also play a key role in boosting our economy.
Rajan stressed on the need to check the flaws in banking system “where a defaulter cannot escape with impunity.”
“We need to constitute state level co-ordination committees to monitor unregistered and illegal operators with the chief secretary, DGP and district collectors in the committees,” he said. “Today, the new mantra in the country is transparency at all levels.”