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.”