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Press Coverage- Banknet India's Second International Bank Tech Summit- 21st September 2006

Shri. V. Leeladhar, Deputy Governor, Reserve Bank of India was the Chief Guest and Mr. Arvind Sharma, Member Secretary, Governing Council and Director, IDRBT was the Guest of Honour. Summit was attended by more than 300 participants from 128 organizations in 10 countries.

29 prominent speakers from RBI, major banks, business schools & IT companies across the globe in 6 session tracks discussed key areas related to Risk Management and Basel-II, Internet & Mobile Banking, Financial Frauds & Information Security, ATMs- Outsourcing, Networks & Trends, Technology for Cooperative & Smaller Banks, Business Intelligence & Knowledge Management.

Summit was covered by The Economic Times, Financial Express, The Business Standard, Indian Express, Hindu-Business Line, DNA Money, PTI,,,, CXO Today, Zee TV etc. For more details on Bank Tech Summit... Click here

Inaugural Address by Shri V Leeladhar, Deputy Governor, Reserve Bank of India ... Click here

Security concerns of banking IT systems should be guarded
Financial Express
Banking Bureau , Sept 22, 2006

There have been numerous instances of security breaches and the consequent perpetuation of frauds in the domestic banking industry. Reserve Bank deputy governor V Leeladhar said the entire chain of procedures and components of an IT system have to be looked at in a holistic manner to ensure that security is all pervasive. He also pointed out the need for standardisation of procedures to ensure inter-operability is provided for.

Leeladhar said banks need to take up straight through processing and inter-operability as key issues to be addressed in all their technological implementations. He also guided the banks to consider the the power of the chip in the mobile phone and use it for extending secure banking transactions to customers.

Meanwhile, in a step towards financial inclusion, Institute for Development and Research in Banking Technology (IDRBT) announced at Banknet India’s second international Bank Tech summit that it plans carry out a pilot project rolling out biometric smart cards in the next six weeks, in collaboration with IIT Bombay.

Arvind Sharma, member secretary, governing council and director, IDRBT, said, “To begin with, this project would be rolled out in the North-Eastern region of the country and later it would be extended to other parts. All kinds of government payments like pension, welfare payments of the government would be channelised through this common infrastructure which is expected to cut down the cost of delivery of these services.”

He further added that these cards would also enable to load subsidies granted under public distribution system. These prepaid biometric smart cards, while serving as a national identification card, is also expected to serve as a centralised core banking system, thereby facilitating the purpose of a rural credit bureau.

Currently, SBI, Andhra Bank, ICICI Bank, HDFC Bank and UBI have agreed to participate in this project. The average cost of each card is expected to be Rs 50-55. Sharma is targeting close to 20,000 accounts under these biometric smart cards by December.

ATM transaction on the rise
Banknet survey shows 64% of respondents are comfortable with the machine

The Business Standard
Sept 22, 2006

Automatic Teller Machines (ATM) are often thought to be just cash dispensing machines or a point to check balance in bank accounts at one convience. But now, more and more people trust this gizmo to deposit their cash and cheques, according to a recent ATM users’ survey by Banknet India.

Out of 300 persons who participated in the survey, 64 percent said they were comfortable with depositing cash and cheques in an ATM. This, perhaps, reflects a change in people’ mindset towards the safety of these machines and accepting the norms of the bank staff counting the notes in their absence, it said. However customers also complained about the non availability of envelopes to stuff cash at ATMs. While the ATM usage is on the rise, customers have some problems in using these machines. Waiting long queues at ATMs remains a bugbear. This indicates the need to install additional machines at high-demand areas.

The limit on daily cash with drawal is another major problem that ATM users often complain about. Perhaps the lack of wide acceptance of debit cards at many shops and outlets makes people to resort to cash with drawal for their needs, the survey said. About 95 per cent of the respondents preferred banking through ATMs over conventional branch banking. Over two-thirds of persons used ATMs more than once in fifteen days.

People are now less hesitant towards the use of ATMs for usual services.

A Smart card in wrong hands?
RBI Has Its Own Concerns over Use Of Smart Cards

The Economic Times, September 22, 2006

The Reserve Bank of India (RB) has expressed concern over use of smart cards, as these could compromise security. Raising this issue in his speech at Banknet India’s second international Bank Tech summit , RBI deputy governor V Leeladhar pointed out that a smart card could fall into wrong hands who would then have access to the digital signature within.

Mr Leeladhar said IT security was a serious challenge as despite repeated discussions on need for security, there have been cases of security breaches and consequent perpetuation of frauds.

In this context, the RBI deputy governor pointed out that smart cards having an in-built digital signature could result in frauds if used by unauthorised persons.

This called for a look at the entire chain of procedures and components of a bank’s system in a holistic manner so that they can ensure that security is all-pervasive across the entire chain of activities.

Incidentally, RBI’s technology arm, IDRBT, has announced plans to issue national smart cards to rural customers, in association with six banks, the postal departments and other intermediaries such as registered NGOs, few government agencies and other financial service entities.

The project also involves the Indian Institute of Technology, Mumbai, and is being funded by the ministry of information technology.

Speaking to the press at Banknet India’s second international Bank Tech summit , Arvind Sharma, director, Institute for Development and Research in Banking Technology (IDRBT), said, “The pilot project would be launched within the next six weeks and we plan to complete the roll-out by the end of November.

In the first phase, we are targeting to reach out to 20,000 customers and over a period of one year, we are aiming at opening five crore such accounts.”

The card would use biometrics and PIN-numbers to identify customers and will have a capacity to store data of the last ten transactions. Banks could even look at loading cash upto a certain limit on these cards, which could operate as savings or pre-paid accounts.

With the Central government laying increasing emphasis upon financial inclusion in the North-Eastern region, the IDRBT plans to launch the pilot project in the region and to begin with, the state of Mizoram.

The banks involved in this project include the State Bank of India, ICICI Bank, HDFC Bank, United Bank of India and Andhra Bank.

Mr Sharma explained that the primary motive behind this exercise was to lower the cost of transactions by minimising use of cash, have a consolidated infrastructure so that all banks benefit from the large scale economies and also, build a database of customer credentials.

These cards would be issued by one of these six banks and can be used even at ATMs of other banks within the group, merchant establishments and point-of-sale outlets.

Banks ready to hit Wireless highway
Mobile Banking attractive for banks as well as customer

DNA Money
September 22, 2006

Mobile Banking is expected to replace debit and credit cards as the most popular mode of conductions financial transaction in the next few years as the number of mobile users increases and customers become more comfortable with the idea.

Mobile banking will be attractive for banks as well as their customers, said experts at Banknet India’s second international Bank Tech summit . Together with giving customers the liberty of transacting their account ‘anytime anywhere’, mobile banking will help banks increase contact with customers which could mean increased revenue and direct marketing opportunities , said Mathew Talbot, managing director of Mobile 365 , a company that provides wireless application services to banks.

Customers using mobile phones for financial transactions are likely to more than double to 256 million from 100 million in 2005.

Mobile banking is already ahead of internet banking; with 11% customers using phones for financial transactions as against 3-4% using the net for the same, analyst said This is essentially because of the lack of familiarity with computers and lower broadband penetration.

“The lack of a broadband network in Indian means that the requirement for mobile banking is stronger than anywhere,” said Chris Buckham , director of marketing with Talgentra, a software and service company for billing and revenue collection, “A strong recollection. ‘A strong requirement will create a need for innovation which will help for innovation which will help India take the lead,” Buckham said.

Mobile phones are currently used mainly for balance inquiries, check book requests and mini statements. Banks like Statements. Banks like State Bank of India, ICICI Bank and HDFC provide mobile services likes SMS alerts.

However, experts said there is more to be done. “There is something missing (even in mobile banking). For example we cannot buy a meal or shop through our mobiles,” said Sharad Agarwal, chief technology officer, Atom Technologies.

Panelists also said that more was needed for people to get used to new technologies. There was also wide agreement that there are still concerns over security in new technologies. “It took 20 years before ATMs were really used but once mobile banking picks up it will transform India. People will stop using roads, they will use wireless highways,” said Anuj Bhargava chief information officer, HSBC Bank.

Choosing right IT solutions key challenge before Indian Banks

September 21, 2006

Choosing right technological solutions and the level of security in its usage are two key challenges facing banks, a top RBI official has said.

Delivering the inaugural address at the Bank Tech Summit being held here, RBI Deputy Governor V Leeladhar said it was necessary for the banks to get the best IT solutions for their respective banks.

"While broad technological contours may be the same, customisation may hold the key for providing the correct system for each individual organisation," he said.

He cited the example of ATMs with multi-functional and regional language capabilities being now viewed as the optimal fit for cash-based and other related transactions.

Calling for a high-level of security in IT, Leeladhar said the entire chain of procedures and components of a system have to be looked at in a holistic manner to ensure that security is all-pervasive across the entire chain of activities.

He also said that it was essential that banks take up straight through processing and inter-operability as key issues to be addressed in all their technological implementations.

"While standardisation does not mean that the same uniform systems are used across all banks, the bare minimum requirements to ensure inter-operability has to be provided for," he said.

For More Press Coverage of Bank Tech Summit... Click here

Inaugural Address by Shri V Leeladhar, Deputy Governor, Reserve Bank of India ... Click here

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