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RBI’s Vision on Technology in the Banking Sector-Mr. G. Padmanabhan

(Opening address by Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, Reserve Bank of India at the Banknet India's Bank Tech Summit at Taj Lands End, Mumbai on September 22, 2005)

It gives me great pleasure to be in your midst, as we start off this conference on Leveraging IT for business benefits in Banks, organized by Banknet India. I am particularly happy to be here to address a group of involved persons who are the harbingers of change –so to say – in the use of technology in Banking.

I would like to recall at this stage, memories of my recent visit to Corpenhagen, Denmark, where I addressed the delegates of SIBOS 2005 on the subject of Transformation in Action in BRIC countries. The SIBOS event was a pleasant eye opener for me, as I could see the visible change in perception about India amongst the international community. India it is stated is a country which could be one of the elite club of G 7 by 2050. Well why not here is a vibrant growing economy (when even some of the advanced countries are grappling with growth and other economical issues), a large , motivated work force delivering services at competitive rates (the contrast is very visible elsewhere ), a country which can boast of the third largest stock market in the world (interest in India by the foreign investors is on the rise and our exchanges perform settlement cycles in time schedules which the rest of the countries are only now aiming at), and stable financial policies which have withstood the change in political ideology of the Government . While we all criticize our educational system-no doubt for valid reasons –It needs to be admitted that it was our rigorous education system and familiarity with English that gave up this competitive edge. Further the population of India particularly its demographics are considered a source of strength than a concern.

Often one tends to benchmark the performance of India against China. To my mind it needs to be appreciated that the two countries followed two different models. While we realized our core competencies as services and IT, China concentrated on manufacturing. While our focus was financial sector, China gave more importance to infrastructure. What is important is that both models have worked. Having ascribed core importance to improvement of the financial services sector, it is therefore imperative that the process of financial sector reforms is continued to meet the challenges of the future, and to ensure that the transformation process is sustained on a long term basis.

Banking in India is has undergone rapid transformation. The last two decades have witnessed a sea change in the nature of services offered decades have witnessed a sea change in the nature of services offered by banks which have has a positive impact on the customers of banks. What was once a public sector dominated scenario with a few foreign banks, has now changed and private sector banks co-exist along with their public sector counterparts who have also adapted themselves well to the changing scenarious .The foreign banks have further widened their operations. The wings of change have again gathered momentum in recent times. We are ushering in CBS- anytime banking.

The Plastic money revolution is gathering speed Technology, undoubtedly, holds the key to success of the new banking order, where receding margins and increasing of businesses and a change in the fundamental way of conducting them.

At this juncture, let men draw a few inscriptions from a recent best seller. ‘The World is flat’ by Thomas Friedman which I happened to read. The book, show cases how the technology revolution was spearheaded and sustained by cities such as Bangalore and Gurgoan in India. Large portions of this much acclaimed book are devoted to discussing the enormous potential of India and the success of the Indian IT sector, particularly the BPO boom. Friedman concludes that what was perceived as doom by the world at large was lapped up as an opportunity by India. The Y2K issues opened up the flood gates of outsourcing to India not only benefited from the dotcom boom ; it benefited more from the dot com bust as well , In his analysis, Friedman voices the supremacy of the Indian software professional, the venture capitalist and the outsourcing service provider. His anecdotal advice to his daughters (“Girls, when I was growing up, my parents use to tell to me, ` Tom, finish your dinner – people in India and China are Starving for your jobs”), perhaps summaries the demonstrable transformation which India has witnessed in ancient times. I was trifle disappointment that Fried man had not touched upon the success saga of Indian Banking an indication perhaps that we need to do more in this area.

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Leveraging IT for business benefits in banks- Welcome address by Mr. Anurag Khanna, Managing Director & CEO, Banknet India at the Bank Tech Summit... Read More

Press Coverage of Banknet India's Bank Tech Summit... Click Here

Banknet India's Bank Tech Summit on 22nd September 2005 was attended by 300 participants from more than 100 banks and IT companies from India, US, UK, Australia, France & Singapore. 20 Prominent Speakers included- Mr. G. Padmanabhan, Chief General Manager - in - Charge, Dept. of Information Technology, RBI, Mr Simen Munter, Chief Operating Officer of HSBC Bank ... Read More


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