Business
RBI proposes IT subsidiary, beefing up cyber security in banking sector
Benaulim (Goa), May 14
Banking could play
second fiddle to Information Technology (IT) in the near future and the
RBI is thinking about starting an IT subsidiary, which will help the
apex banking regulator to develop policy as well as capabilities in the
sector, RBI Governor Raghuram Rajan said on Thursday.
Rajan, who
was addressing a press conference after a meeting of the RBI's central
board in a coastal resort 50 km from Panaji, said a precise structure of
the IT subsidiary had to be fleshed out in order to attract IT talent
as well as focus on cyber security and supervise the nature of the
banks' technical capabilities.
Earlier, in his brief statement on
the discussions carried out by the Reserve Bank of India's Central
Board, Rajan said: "We talked about the changing nature of information
technology and the need to keep abreast.
"The changes are so
rapid, one of the directors said that today we have banking which uses
information technology, tomorrow it's going to be an information
technology company which does banking. So we have to keep tabs on that.
"We
have to worry about cyber supervision and with that in mind the Board
suggested that we should focus on perhaps thinking about an IT
subsidiary which would help us develop policy as well as capabilities in
the area of information technology," he also said.
Asked if the
levels of cyber security in India's banking sector matched up to those
in place in the corresponding sector in the developing world, Rajan said
while India did have "a lot of capability" in the IT area, there was
need to "constantly examine our readiness in the face of the kinds of
new innovations inside cyber crime".
"I think that while thus far
we have been relatively immune from this (cyber crime and hacking) we
cannot take that for granted and the kind of hacking attacks that have
happened in the West, I don't think we should consider them as unique to
those areas. We have to prepare for whatever developments take place in
those areas," Rajan said.
Elaborating on the proposed IT
subsidiary, Rajan said: "This entity, the precise structure has to be
worked out, but would enable us to attract people from this area, but
also focus very much on issues concerning systems such as cyber
security, such as supervising the nature of technical capabilities of
banks."