Bad loans haven't peaked yet: Rajan | Business Standard News

Bad loans haven't peaked yet: Rajan | Business Standard News


a welcome move

This refers to the report
“Central bank plans IT subsidiary to check cyber frauds”(May 15). Read with the
RBI central board director’s observation that “today, we have banking which
uses IT; tomorrow, it is going to become an IT company that does banking”, the
proposal to have an IT-dedicated subsidiary makes immense sense. If the
proposal has to materialise, Dr Rajan will have to identify the E Sreedharan who
can be entrusted with the job of making the impossible possible.
Generally, the clients of
IT-giants in Indian financial sector are already twenty years late in
recognising the ills of outsourcing services which are going to be of long-term
nature. It is not just the financial exploitation by the service providers that
affects this category of IT-users. As the contracts have fixed tenures, this
affects future planning. Long-term dependence on single service provider
results in developing vested interests, or put mildly, prevents choices less
The issues of secrecy and
security in financial transactions which are the major concerns which would
have made the central bank think in terms of an IT-subsidiary need to be
addressed on a priority basis by the top managements of all financial
institutions. The minimum time-lag necessary between  changes in technology and procedures to enable
the institutions and the customers will take to adapt new systems also should
be factored in while introducing changes.

M G Warrier,


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