The committee has also recommended a new legislation on electronic funds transfer system to facilitate multiple payment systems to be set up by banks and financial institutions.

The RBI released the Vasudevan committee report on Tuesday. The committee, headed by RBI executive director A Vasudevan was constituted in September 1998. It had epresentatives from the government of India, banks, RBI and academic institutions associated with information technology.

The RBI had set up the committee to examine issues pertaining to technology and suggest steps for a time0-bound implementation of the second Narasimham panel recommendations.

The committee has called for setting up a standing committee of members drawn from legal departments of RBI, Indian Banks' Association (IBA)and a few banks to examine legal issues on electronic banking and also to scrutinise issues on confidentiality of data in the computerised environment and in the context of banker's secrecy obligations.

The committee has suggested that Infinet (Indian financial network) should be a blend of 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 has stated that there should be an appropriate institutional arrangement for key management and authentication by way of a certification agency and Institute for Development and Research in Banking Technology (IDRBT) should be appointed for the purpose.

The Vasudevan committee has said that RBI and banks should also have a standing committee with members having requisite expertise to periodically review standards, security policies, software system and their implementation.

The committee has recommended banks tooutsource software technology since it is a better option in the context of rapid changes in the Information Technology (IT) industry.

"All branches of banks dealing with government transactions need to be computerised and suggested that in the first phase, computerisation of all focal point branches and state government link cells should be completed by March 31, 2000 to be followed by the second phase on an expeditious basis," the report said.

According to the report, a need was felt for connecting public accounts departments of RBI to central accounts section, RBI, Nagpur to enable same day reporting and booking of government transactions.

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