RBI warns banks to comply with guidelines on e-security

Chennai:

Reserve Bank of India will initiate action against banks that do not comply with the guidelines on electronic security of its transactions and operations by October 2012, according to RBI executive director G Gopalakrishna.

Speaking to reporters after delivering the keynote address on ‘Banking on e-security’, Gopalakrishna, who is head of the working group of the Central Bank that has recommended strengthening the information technology architecture to tackle cyber fraud, said RBI will take a serious action against banks that do not implement the recommendations of the committee.

He also said some banks lack proper security policy, methods to monitor the service level agreements with third parties and inadequate audit trail. “There is lack of assessment of legal risk arising from IT related legislation and the process of designing and development of awareness programs for customers is not in place in banks,” Gopalakrishna said.

“It is important to see tangible benefits to both customers and banks arising from effective implementation of guidelines by banks. The demand placed from all commercial banks is high and all commercial banks may have gaps, albeit at different levels, between their current state and expectations from RBI guidelines, which require to be bridged at the earliest,” he said.

The working group submitted its report last January and the final guidelines were circulated to all banks last April.

M Narendra, chairman and managing director of Indian Overseas Bank said that after a series of ATM frauds, the police held meeting with bankers to enable mechanisms to plug aberrations. “It is the responsibility of the banks to put in safety mechanisms or its reputation is at stake,” he said.

K Srinivasan, president of Cyber Society of India, also spoke on the occasion.