The RBI recently unveiled its IT vision for 2008-10, the second in its series after the maiden vision document posted on its site in 2005. In the annual policy statement 2005-06, the then RBI Governor had announced that the bank would be bringing out a 'Financial sector Technology Vision Document' aimed at providing banks with inputs on medium term policy perspectives.

The document was scripted after comments, feedback and consultation with banks; and the first vision document was unveiled for the period 2005-08. The important domains covered were IT for regulation and supervision, IT for IDRBT (Institute for Development & Research in Banking Technology), IT for the financial sector, and IT for government-related functions. The punchline for the vision statement was 'IT for Efficiency and Excellence'.

Trend Towards Centralisation

The Apex bank has noted in the review of the 2005-08 vision statement in the 2008-10 vision document that centralisation is again becoming a trend. In the late 1980s, the use of DPCs (data processing centres) was a characteristic feature of computer-based processing. Then came the age of localised operations, and currently we are experiencing a similar trend to centralised processing capabilities in data centres again.

This has also been mentioned in the RBI vision statement for 2008-10 which says, "The move would be towards centralisation of the system for greater customer service delivery. The Reserve Bank too has adopted this approach for its own operational requirements, in a manner similar to other banks in the country."

Responding exclusively to a query from Biztech2.0, an RBI spokesperson said, "Centralisation of the IT system provides better customer service. For example, in a centralised IT environment, a bond holder can get holdings serviced at any office of the RBI. The main challenge in this regard is the need to make all application systems work in a centralised environment, but with a facility of a decentralised access – an activity the RBI is currently engaged in."

RBI’s Participatory Role

The apex bank has also mentioned in the vision document that from now onwards it will play more of a participatory role with banks on the IT front. Post-liberalisation, the RBI had played a substantial role in ushering in technology-based banking and for large-scale computerisation. However, the bank says the banking industry has come of age and gradually it would move away and take a participatory role. All the banks that have commenced operations in the post-liberalisation era are fully computerised, as per RBI requirements.

With technology becoming deeply rooted in the banks’ functioning, the RBI has now taken the approach of requesting banks to proceed with their IT initiatives depending on their specific requirements. However, the apex bank said, "Where there are interfaces with the central banks’ systems or where inter-bank interfaces such as payment systems are required, the RBI has indicated the need for banks to follow common standards." To enable banks to plan their IT implementations in a scientific manner, the RBI will outline its IT plans for the near future.

The bank also stated that it will also proactively support IT initiatives in achieving financial inclusion.

RBI's Role in Debt Management

It is the RBI's statutory responsibility to handle debt management for the Indian government. According to a statement from the bank, "All the functions related to the management are IT-enabled, including the provision of the dealing platform for trading in government securities using the Negotiated Dealing System that now uses the order matching facility and provides better market related features from the initial version of screen based trading."