RRBs should move to core banking by 2011: RBI panel

A working group set up by the Reserve Bank of India has suggested that all the regional rural banks (RRBs) should move to the core banking platform by September 2011. This will help them undertake 90 per cent of their business on the platform.

The cost of moving RRBs to core banking services (CBS) is estimated at Rs 730.78 crore. All RRBs are likely to get financial help but sponsor banks may have to contribute 25 per cent of the cost.

Over the next 12 months, the RRBs should perform 25 per cent of their businesses through CBS and by September 2010, this should be 50 per cent, the group on technology upgradation of RRBs said.

 

All new branches opened after September 2009 will have to be CBS-compliant from day one. IT will enhance the banks’ reach and delivery to the remote parts of the country.

The existing IT infrastructure should be taken into account, along with models available in the market and financial costs involved in implementing the technology solutions, the group emphasised.

The difference in the level of computerisation between different RRBs would have to be considered for any technology upgradation. The group has suggested the Application Service Provider model for the core banking platform. The respective sponsor banks can choose their own service provider for their RRBs.

With a view to provide IT support to Urban Cooperative Banks (UCBs), RBI also set up Working Group on IT Support for UCBs.

It has specified the minimum IT infrastructure that should exist in UCBs irrespective of their size, location and profitability.