Amid a surge in the number of bank scams, including the recent Rs 400-crore Citibank fraud, the Reserve Bank of India (RBI) is considering putting in place a system that will allow it to directly monitor all transactions at various banks.
Once in place, the new system will enable complete automation for submission of transaction returns filed by banks to RBI, doing away with the need for manual intervention.
RBI has begun the consultation process for implementing the new system, which could require banks to upgrade their computer hardware and software solutions, according to a senior official.
Although the submission of transaction reports is already an automated process, it involves at least four steps that involve manual interventions.
Currently, banks receive information from their various branches, then integrate the data and store it, followed by data conversion and then data submission to RBI.
According to the proposed move, the entire data flow will be completely automated and will help banks in terms of enhanced data quality, timeliness, and reduced costs, besides a direct oversight by RBI for any possible fraud.
Frauds in the banking sector had hit a record high of Rs 2,017 crore in 2009-10. A fraud case, reportedly involving Rs 400 crore, came to light last week. The police arrested a senior official at a Citibank branch in Gurgaon.
