The Reserve Bank of India’s proposal for setting up an information technology subsidiary is expected to take shape in the next six-to-eight months. The IT subsidiary will have experts from the domain to check cyber threats besides helping RBI harness technology for effective use in regulation and supervision.
“With banks planning for a paperless banking system, which is largely IT dependent, a dedicated IT subsidiary is needed to stay ahead of cyber criminals. The subsidiary will help RBI to harness IT for effective use in regulation and supervision,” RBI governor Raghuram Rajan said, while speaking at the 11th Institute for Development and Research in Banking Technology (IDRBT) awards ceremony.
He said the IT adoption can reduce the higher cost structure prevalent in the banking system. “The IT subsidiary is likely to take shape in the next six-to-eight months. It will work in consultation with IDRBT,” deputy governor HR Khan said.
The apex bank has already received the board approval for the appointment of a chief executive officer. At its recent board meeting, RBI mooted setting up an information technology subsidiary that would help increase its capabilities in the sector.
“Am IT subsidiary will help us on issues such as cyber security and evaluate the technical capabilities of banks,” Rajan said. “We have to constantly examine 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. “It’s time to create less tradeoff between convenience and security at same time by the banks.”
With growing dependence on IT 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 that 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.
Meanwhile, IDRBT signed an MoU with National Payments Corporation of India (NPCI) for a research collaboration in the areas of mobile payments and analytics.
Earlier, Raghuram Rajan delivered the 30th lecture on the theme “Reforming India’s Economic Institutions” at Sardar Vallabhbhai Patel National Police Academy in Hyderabad.
He stressed the role of government spending in reviving growth, especially because exports are not doing as well as in the past. “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 on 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,” he said.