Prof. S. Sanyal, School of Technology & Computer Science, TIFR
The credit policy, recently announced by RBI will have severe implications in the world of technology and the way banks look at it. From the consumer's perspective, one feels that if everything works out as planned, nothing could be better. Instant clearing of checks, electronic funds transfer, digital certificates ... what more could the consumer ask for?
But looking at it from the banker's point of view, it might mean burning midnight oil and implementation of state of art encryption techniques. The network has to be extremely secure to be able to handle what the RBI proposes in its credit policy. Banks might need to invest additional amounts in employing ethical hackers to find loopholes in the network and correct them. More importantly, any solution provided should be scalable to cover large areas so as to reach all corners of India.
In the new policy, the RBI has also proposed implementation of negotiated dealing system (NDS), electronic clearing service (ECS) and electronic funds transfer (EFT). This would mean enhancing banking networks in terms of security by means of use of Public Key Infrastructure (PKI) and Digital Signatures. Though the Government had been promoting the usage of technology in our day-to-day lives for a long time, things are taking a concrete shape finally. The identification of certifying authorities, formation of a separate IT ministry, all are forward moving steps in this regard.
The banks should gear up in the manner they did before the Y2K crisis. Everyone in the Government, including top officials were after various financial institutions in the country to make their systems Y2K compliant. Regular statistics were being published in the media. And, it worked. We could move over to the new century without any major problem. With the new paradigm shift towards electronic age banking, a similar approach needs to be adopted. Then only we can succeed in implementing the latest policy.
Another important but less thought-of area is that of upgrading the knowledge level of the Senior and Middle level staff of various banks. Young bankers will learn, as they are growing with the changes, not so for the older lot. So, banks will have to make special provision for educating their staff and also to be progressive in a pragmatic manner. And one more point, which is emerging, is Electronics and Computerised staff is to assist human beings (Bankers and Bank Users both). Sometimes, in the haste of total computerisation, one looses the focus that Banks should have possibly more human interaction than earlier. People simply cannot keep talking to machines or keep punching numbers to get a solution, where they could have achieved the same in a shorter time with human help. I applaud the right directional movement by RBI but would like to stress that human element should not be abolished. Then only we will achieve a total solution, be it in Banking, or in any other field.