Must invest adequately in IT systems: RBI Governor Shaktikanta Das to banks

Underscores urgency to keep up with growth of digital payments

The Reserve Bank of India (RBI) on Friday underscored the urgency for banks to bolster their IT systems to keep up with the fast-paced growth of digital payments in the country.

“Banks should invest adequately (in IT systems),” said RBI Governor Shaktikanta Das at a post-monetary policy press conference, adding, “IT systems, the capacities, and the overall infrastructure have to keep pace with the growth of business.”

The RBI does not prescribe regulated entities, such as banks, the amount they should allocate towards their IT infrastructure.

The online money transfer mechanism faced a major issue on June 4 when investors, looking to capitalise on a sell-off in the equity market through mutual funds, struggled with delayed transfers of payment to fund houses.

Das, on payment outages, asserted that the challenges lay not with the Unified Payments Interface (UPI) but with banks themselves. “I want to say this emphatically that whenever there is an outage, there is no problem on the UPI-end or the NPCI-end. The problem arises on the part of banks. We should keep that in mind,” he stated.

In the event of an outage, the RBI’s Cybersecurity and Information Technology Examination (CSITE) team swings into action, engaging with the affected bank, supervising the issue, and monitoring it to ensure necessary action is taken. “If there is a problem, we see whether the system has any deficiencies and we advise banks to take necessary corrective actions. Also, the disaster recovery centres (DRCs), need to be kept active always,” said the RBI governor.

Banks are mandated to report both planned and unplanned outages on the RBI’s portal. RBI Deputy Governor Swaminathan Janakiraman: “If there are any outlier entities, we talk to them on a bilateral basis and we also issue them a corrective action plan to augment their infrastructure proportionate to the growth in business levels.”

In a bid to alleviate the pressure on banks, the RBI is championing the use of UPI Lite. “The purpose of the UPI Lite wallet is to reduce the pressure on bank systems. So UPI Lite is gradually becoming popular. We have about 10 million transactions on UPI Lite per month, and once that increases, the pressure on bank systems will reduce,” said RBI Deputy Governor T Rabi Sankar.

UPI Lite, an on-device wallet, allows users to make payments of up to Rs 500 without the use of a UPI PIN. It facilitates low-value transactions without tapping into a remitter bank’s core banking systems in real time.

"Whenever there is an outage, there is no problem on the UPI-end or the NPCI-end. The problem arises on the part of the banks. We should keep that in mind”
 

Shaktikanta Das, RBI Governor