RBI mulls IT subsidiary to tackle online banking crimes

 The Dollar Business Bureau In a move to overcome the challenges and threats posed by cyber security, the Reserve Bank of India (RBI) is likely to create a subsidiary entity that would supervise and formulate policies for strengthening cyber security in the Indian Banking sector. A statement, in this regard, was said to have been made by Raghuram Rajan, Governor, RBI, while addressing media post the central board meeting of the monetary authority in Goa, on Thursday. The Reserve Bank of India is planning to set up an information technology wing to face the rising challenges coming from cyberspace, said the RBI Governor, according to the reports. We've to worry about increasing issues about cyber-security, we've to worry about cyber supervision and with that in mind, the board suggested that we focus on an IT subsidiary which would help us develop policies as well as capabilities in the areas of IT, added the RBI Governor during his interaction with media. The proposed IT entity’s structure has to be worked out, he further informed, while also highlighting the need to focus on issues regarding supervision on nature of technical capabilities of our banks, the new payment banks which are going to be IT-intensive as well as the small finance banks. Further stating that the Central board has discussed about the changes in information technology, he referred to a statement that ‘we have banking which uses IT today, tomorrow it’s going to become an IT company which does banking’, to have been made by one of the directors in the meeting. In view of the rapid development in online and mobile payment modules, there is a need for an increased focus on cyber-security trends, said the RBI Governor and added, ‘RBI is also concerned about its own resources and products such as the platform for e-auctions of government debt and trading of bonds on its negotiated dealing system-order matching platform, among others. While the nature of the subsidiary is yet to be formulated, the RBI Governor says the new entity would attract more people from the IT sector and will have constant focus on the issues related to the cyber security. The number of cybercrimes involving illegal withdrawals, hacking of bank accounts, among others, has worried RBI and in this regard, the supposed move by the RBI would definitely be a positive step to tackle the online crimes related to banking.    

May 15, 2015 | 4:34 pm IST.