The Reserve Bank of India (RBI) has recently released the Report of the High Level Committee (HLC) on the IT Vision of Reserve Bank of India 2011-2017. The HLC report includes the IT Vision document for 2011-17.RBI has set some very ambitious objectives for itself. These include transforming itself into an information intensive knowledge organisation, harnessing human resource potential, migration to enterprise architecture for IT systems, adopting appropriate business process re-engineering, etc.
RBI has also stressed upon improving its IT governance, effective project management, evolving well defined information policies as well as information security frameworks, better vendor management and outsourcing practices.
The Vision Document suggests commercial banks to move forward from their core banking solutions to enhanced use of IT in areas like MIS, regulatory reporting, overall risk management, financial inclusion and customer relationship management.
It also dwells on possible operational risks arising out of adopting technology in the banking sector which could affect financial stability and emphasises the need for internal controls, risk mitigation systems, fraud detection / prevention and business continuity plans. However, concepts like Internet banking cannot succeed in the absence of legal framework in this regard.
According to Praveen Dalal, leading techno legal expert of India and a Supreme Court lawyer, we have no dedicated Internet Banking Law in India. Although, RBI has issued many guidelines in this regard and even our Information Technology Act, 2000 contains some indirect and implied provisions for Internet Banking yet we need a separate and dedicated law in this regard, opines Dalal.
Similarly, the present banking and other technology related legal frameworks are not conducive for mobile banking in India. We do not have a well developed e-governance infrastructure in India. Similarly, on the front of e-commerce as well, India is not much successful.
RBI will begin implementing the recommendations of the HLC shortly. However, commercial banks in India must not wait for RBI’s initiations in this regard. They must start implementing due diligence requirements as prescribed by RBI as soon as possible.
