IDBRT launches national financial switch

The Institute for Development and Research in Banking Technology (IDBRT) has launched the National Financial Switch (NFS), facilitating connectivity between the switches of individual banks and their ATMs apart from an inter-bank payment gateway which will authenticate and route details of e-commerce transactions.

Initially, the NFS will provide connectivity among three banks "� Bank of Baroda, Corporation Bank and ICICI Bank "� while 15 more banks including SBI and UTI Bank, would be connected to the NFS in the next fortnight. The installed base of ATMs in the country is estimated to be around 15,000 and it is expected to double by the end of calendar 2005.

The NFS was dedicated to the nation by Reserve Bank of India governor Y V Reddy, Insurance Regulatory Development Authority (Irda) chairman C S Rao and Securities and Exchange Board of India (Sebi) chairman G N Bajpai on Friday.

Speaking at the launch, V P Gulati, director of IDBRT, said that the infrastructure would ensure that the customers irrespective of which bank they chose to transact with could walk across to the nearest ATM to transact.

The NFS has a default interchange switching fees between the banks, if the banks do not have their own mutual agreements already drawn out.

Earlier, Bajpai said that the various regulatory agencies in the country needed to set up an effective co-ordination mechanism.

Endorsing the action of the RBI to institutionalise and monitor the systematically-important financial institutions in the country, he felt that the success would largely depend on how quickly the concerned agencies embraced IT tools.

"There is a close linkage between the stock market and the banking system and this is a welcome move by the RBI governor," Bajpai said. "It is worth establishing an effective coordination between the various regulatory agencies," he said.

According to Bajpai, Sebi is all set to further the process of using information technology to regulate the markets better by introducing a market participation identification number (MAPIN), which is a notable sophistication of capturing biometric unique identity of the intermediaries and issuers over a period of time and eventually the investors.

"The web-enabling feature will help the real-time activity with the integrated surveillance system functioning on the lines of warehouse of a classic IT structure planned by Sebi. The integrated surveillance of stock exchange trading on the lines of a warehouse planned by the regulator will absorb the latest IT architecture," he said.