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Full Text of 2nd Quarter Review of Monetary Policy 2011-12 click here

Second Quarter Review of the Monetary Policy for 2011-12
-Announced on the 25th October 2011

Part B. Developmental and Regulatory Policies

VI. Institutional Developments

Performance of National Electronic Funds Transfer System

115. All the refinements to the national electronic funds transfer (NEFT) have been well accepted by the stakeholders and the product is growing from strength to strength in terms of acceptability, reach and volumes handled. As at end-September 2011, around 79,500 branches of 103 banks participated in the NEFT system and the volume of transactions processed increased to 17.5 million. A few banks have also successfully and seamlessly brought the RRBs sponsored by them under the NEFT ambit. More RRBs are expected to join the NEFT soon.

IT Vision Document for 2011-17

116. As indicated in the Monetary Policy Statement of May 2011, the High Level Committee (Chairman: Dr. K. C. Chakrabarty), constituted by the Reserve Bank to prepare an IT vision document for the period 2011-17, made recommendations relating to both the Reserve Bank and commercial banks. Action points stemming from the IT vision document have been identified and a Standing Committee (Chairman: Shri Anand Sinha) has been formed to monitor the progress of implementation of the IT vision document. A Steering Committee (Chairman: Shri G. Padmanabhan) has been constituted to ensure the smooth implementation of the recommendations as given in the IT vision document.

Automated Data Flow from Banks

117. As indicated in the Monetary Policy Statement of May 2011, a Core Group consisting of experts from banks, the Reserve Bank, the Institute for Development and Research in Banking Technology (IDRBT) and the IBA had prepared an approach paper on automated data flow (a straight through process) from the CBS or other IT systems of commercial banks to the Reserve Bank. Following the Reserve Bank’s advice to put in place, at the earliest, a system by which the Reserve Bank returns can be sourced directly from the banks’ CBS and other IT systems without any manual intervention, all banks have submitted their action plans. Further, they have been submitting quarterly progress in the prescribed formats. Some of the banks have already started generating a few returns directly from their source systems. To facilitate smooth and speedy implementation, a working group with representatives from a few banks has been formed. Banks are being advised to increase the pace of bringing the returns under automated data flow and the progress in this regard is being closely monitored.

Real Time Gross Settlement System

118. As indicated in the Monetary Policy Statement of May 2011, the Working Group constituted for preparing an approach paper for implementing the next generation real time gross settlement (NG-RTGS) system, submitted the approach paper, the suggestions of which were taken as a basis for preparing the blueprint for the NG-RTGS system. The Reserve Bank is in the process of identifying the suitable solution under the guidance of a Technical Advisory Group (TAG) with members from reputed technology institutes, banks and the Reserve Bank.

Currency Management

119. One of the key recommendations of the High Level Group on Systems and Procedures for Currency Distribution (Chairperson: Smt. Usha Thorat) was that to address the tendency of under-reporting of cases of detection of counterfeit notes to the Reserve Bank/police, the requirement of filing first information report (FIR) should be done away with, where any person inadvertently in possession of counterfeit notes up to five pieces tenders the same at a bank counter. Taking into account all relevant issues and in consultation with the Government of India, the Reserve Bank instructed the banks that (i) for cases of detection of counterfeit notes up to four pieces, in a single transaction, a consolidated report should be sent to the police authorities at the end of the month; and (ii) for cases of detection of counterfeit notes of five or more pieces, in a single transaction, FIRs should be lodged with the nodal police station/police authorities as per jurisdiction. It will ensure that all cases of detection of counterfeit notes at bank branches/treasuries are promptly reported to the Reserve Bank/police authorities.

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Second Quarter Review of Monetary Policy 2011-2012... click here

Highlights of 1st Quarter Review of Monetary Policy 2011-2012... click here

Macroeconomic & Monetary developments: Second Quarter Review 2011-12... click here

RBI CREDIT AND MONETARY POLICIES (1999-2012)... click here

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